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Braemar Plc Annual Report and Accounts 2024
Resilience
Growth
Braemar Plc
Annual Report and
Accounts 2024
Resilience
Resilience
Growth
We are a leading provider
of expert advice in shipping
investment, chartering and
risk management.
Our Purpose
To leverage our expertise
and experience to secure
sustainable returns and
mitigate risk for our clients
in the volatile worlds of
shipping and energy.
Our Vision
To enable more
prosperous, secure and
sustainable global trade
within the shipping and
energy industries.
Resilience
Resilience
Growth
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
1
Highlights
Contents
Operational highlights
Financial highlights
– Revenue at £152.8 million unchanged on prior year, illustrating
improved resilience across the Group (FY23: £152.9 million), with strong
performances from acquisitions and Risk Advisory offsetting weaker
performances in other parts of the business.
– Underlying operating profit of £16.5 million a decrease of 18% due
to acquisition-related costs and foreign exchange movements
(FY23: £20.1 million).
– Reported profit before tax £7.5 million (FY23: £9.5 million), with lower
underlying operating profit offset by lower specific items than the prior year.
– Balance sheet remains strong with positive net cash position maintained.
– Underlying earnings per share decreased by 21% to 36.62 pence
(FY23: 46.22 pence).
– Final dividend of 9.0 pence per share. Total dividends for the year are
13.0 pence per share (FY23: 12.0 pence) an increase of 8%.
– Acquisition of Southport Maritime Inc. in the USA and Madrid Tanker
desk in Spain, have performed well in their first full year as part of the
Group, realising the opportunities and benefits of being part of Braemar’s
global business.
– Natural Gas desk has grown strongly throughout the year.
– Transaction volumes continued to grow with fixture numbers up 8% from
prior year.
– Average revenue per head continues to be strong at £373,000, 6% down
on the prior year as the business continued to invest in new headcount.
– The Group’s forward order strengthened throughout the year, standing
at $82.6 million as at 29 February 2024, 47% higher than the $56.2 million
as at 28 February 2023.
– The internal independent investigation commenced in June 2023 was
completed in October 2023.
Strategic Report
1 Highlights
2 Braemar at a Glance
4 Chairman’s Statement
7 Investment Case
8 Business Model
10 Our Strategy
12 Group Chief Executive Officer’s
Statement
14 Q&A with Management
16 Key Performance Indicators
18 Market Overview and Outlook
20 Operating Review
24 Financial Review
28 Section 172 Statement
30 Environmental, People and Social
Governance (“EPSG”) Report
32 Our environmental
responsibilities
36 Task Force on Climate-related
Financial Disclosures
38 People
40 Society
41 Governance
42 Non-Financial Information Statement
43 Principal Risks and Uncertainties
Governance
50 Compliance Statement
51 Letter from the Chairman
54 Board of Directors
56 Report of the Audit & Risk Committee
61 Report of the Nomination Committee
62 Directors’ Remuneration Report
65 Remuneration Policy
72 Annual Report on Remuneration
79 Directors’ Report
Financial Statements
82 Independent auditor’s report
90 Consolidated Income Statement
91 Consolidated Statement of
Comprehensive Income
92 Consolidated Balance Sheet
93 Consolidated Cash Flow Statement
94 Consolidated Statement of Changes
in Total Equity
95 Notes to the Financial Statements
149 Company Balance Sheet
150 Company Statement of Changes
in Total Equity
151 Notes to the Company Financial
Statements
162 Five-year financial summary (unaudited)
164 Contact information
Shipbroking
Focus
Braemar Plc Annual Report and Accounts 2024
2
Braemar at a Glance
Expert advisers in investment,
chartering and risk management
for the shipping and energy
markets. Our integrated teams
deliver creative solutions and
tailored support for customers
around the world, placing
Braemar at the forefront of the
shipbroking industry.
Our experienced brokers work in tandem
with specialist professionals to form teams
tailored to our customers’ needs, and
provide an integrated service supported
bya collaborative culture.
Investment Advisory
The right vessels, at the right price,
at the right time. Our team combines
years of commercial, financial, technical
and operational expertise with the
most comprehensive market analytics
in the industry to create investment
opportunities that are both protected
and maximised for sustainable returns.
Complemented by our Corporate
Finance desk which assists those facing
liquidity crunches with loan portfolio
pricing, management and restructuring.
Chartering
Customised chartering solutions built
around the specific needs of our clients.
By investing in cutting-edge technology
and bespoke databases, our brokers and
analysts create innovative strategies that
deliver long-term gains over short-term
fixes.
Risk Advisory
Volatile price movements are
commonplace in shipping markets. Our
Securities desk helps our clients manage
their exposure by providing access to
liquid marketplaces.
Who we are
How we operate
What we do
Our locations
The business is structured in three divisions, reflecting our operations
We operate 24/7 across
the world, covering all of
the major shipping hubs
to provide our customers
with unique opportunities
in both established and
emerging markets.
Shipbroking
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
3
+16
Global offices
+15
Sectors
+400
Employees
United Kingdom
Aberdeen
Greece
Athens
People’s Rep. China
Beijing
UAE
Dubai
Switzerland
Geneva
Germany
Hamburg
USA
Houston
United Kingdom
London
Spain
Madrid
Australia
Melbourne
India
Mumbai
India
New Delhi
Australia
Perth
People’s Rep. China
Shanghai
Singapore
Singapore
USA
Florida
Perform
Braemar Plc Annual Report and Accounts 2024
4
Invest
Chairman’s
Statement
Perform
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
5
Nigel Payne
Chairman
Through our
growth strategy
we are building an
increasingly resilient
business, designed to
generate sustainable
returns for our
shareholders.
Furthermore, this performance was
delivered against the backdrop of
the independent internal investigation,
which took place during the year,
further illustrating the strength of the
business and our people. I would like to
thank all our stakeholders, once again,
for their patience as the board worked
through this.
Looking ahead, we have established
a strong platform for growth and will
continue to focus on growing the
business, through making key hires and
acquisitions, which further bolster our
offering, to ensure that Braemar provides
the best possible service to its clients
and generates strong sustainable returns
for shareholders.
Results for the year
Revenue for the year at £152.8 million
(FY23: £152.9 million), was broadly
unchanged from the prior year, while
fixture numbers increased by 8%, as
we continued to grow our market share.
As anticipated, underlying operating
profit was £16.5 million, £3.5 million lower
than FY23 due to a £2.6 million negative
swing in foreign exchange translation
movements and acquisition costs
relating to the Madrid Tanker desk
(£1.5 million).
Reported profit before tax at £7.5 million
was £1.9 million lower than the prior
year, with the £3.4 million decrease in
underlying profit before tax being slightly
offset by lower specific costs than the
prior year. Underlying earnings per share
was 36.62p (FY23: 46.22p) and reported
earnings per share 15.65p (FY23: 15.85p).
The Group maintained a positive net
cash position of £1 million at the end of
the year (FY23: £6.9 million), lower than
the previous year due to tax payments
and the cost of the independent internal
investigation that was conducted and
concluded during the year.
As we continue to execute our growth
strategy we have continued to invest
in our people. Average headcount in
the year has increased by 7% to 409
(FY23: 384), as we invested further in
our platform for growth by adding both
brokers and support staff.
Board
During the year, we continued to
strengthen our board. Cat Valentine
joined the board as non-executive
director in May 2023, adding valuable
communications experience to the
board. Grant Foley also joined the
board in August 2023 as Group Chief
Financial Officer. Grant brings significant
financial and operating expertise,
having worked in a number of public
and private companies in executive
finance and operations roles. Grant’s
contribution since his appointment
has been impactful.
The board is well balanced and
functioning well and I look forward to
working with my colleagues in the year,
as we continue to execute our strategy.
Internal independent investigation
As announced on 26 June 2023,
the board commenced an internal
independent investigation into an
historical transaction dating back to 2013.
I am delighted to report another strong
revenue and underlying operating profit
performance for the Group. These
results underline the success of our
strategy to grow the business, build
resilience and generate sustainable
shareholder returns, across the shipping
cycle. We are confident that through this
strategy, we are well placed to perform
strongly throughout any cycle.
Braemar Plc Annual Report and Accounts 2024
6
13.0p
total dividend for the year
+8%
The investigation was conducted by
FRP Advisory Trading Limited, an
independent specialist forensic
accounting firm, and independent
external counsel. The investigation
was complex, comprehensive and
ultimately focused on a review of
several transactions between 2006 and
2013. The provision in relation to these
transactions was accounted for in the
prior year Financial Statements.
The internal independent investigation
was completed in October 2023
and the board remains committed to
maintaining a high standard of corporate
governance. The board acted promptly
to oversee the process to address the
process and control areas that were
identified as requiring improvement.
Dividend
In line with the Company’s progressive
dividend policy, I am pleased to announce
that the board is recommending a
final dividend of 9p for approval by
shareholders at the 2024 AGM. This
final dividend, together with the interim
dividend of 4p already paid on 2 April
2024, represents a total dividend for the
year of 13p, an 8% increase over the prior
year dividend of 12p. The final dividend
will be paid on 9 September 2024 to
shareholders who are on the register at
the close of business on 2 August 2024,
with a corresponding ex-dividend date of
1 August 2024. The last date for Dividend
Reinvestment Plan (“DRIP”) elections will
be 16 August 2024.
Chairman’s
Statement continued
Our impact
At Braemar we care about the impact
that we have on the environment and
society, the shipping industry accounts
for approximately 3% of global emissions
and we work closely with our clients
as they seek to reduce their impact
through alternative fuels, new more fuel-
efficient vessels and providing access
to carbon credits and other offset
schemes. We also focused on reducing
the impact that we directly have as a
business, although we have seen our
GHG emissions increase this year as the
business returned to more normal levels
of travel following on from COVID. As in
prior years, we have once again been
carbon neutral though investing in
offset programmes.
Our people
As noted above, we continued to invest
in our people throughout the year
under review. Once again, I have been
impressed by their commitment and
resilience. On behalf of the board, I would
like to take this opportunity to thank our
people for their dedication, hard work
and focus.
Outlook
Global trade volumes continue to rise
in an increasingly complex operating
environment and the global fleet size
has remained static. With the investment
made in Braemar’s platform to date, the
Group is well positioned to capitalise
on these prevailing favourable market
conditions and grow its volumes further.
In addition, we will continue to focus on
further growth through hiring, opening
new offices and a disciplined M&A in a
fragmented market, while maintaining
strong cost management. The new
financial year has started well with
trading to date in line with the board’s
expectation. The Group remains on track
to deliver a sustainable doubling of FY21
underlying profit in FY25 and the board
looks to the future with confidence.
Nigel Payne
Chairman
22 May 2024
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
7
Investment Case
Our growth strategy is delivering an increasingly
resilient business that will generate sustainable
returns for our shareholders.
Nigel Payne, Chairman
through the shipping cycle
Braemar has a clear and successful
growth strategy, orientated around
organic and acquisitive expansion.
Braemar therefore offers an attractive,
diversified opportunity to invest in the
shipping industry, without the need
to invest directly in vessels. Braemar’s
strategy is to drive sustainable profit and
growth as well as progressive dividends.
We remain focused on delivering
sustainable returns for our shareholders.
The Company has built a strong platform
from which to both deliver organic
growth and act as a consolidator in a
fragmented shipbroking market. The
Group has a strong balance sheet and,
as the business continues to scale, the
board is focused on delivering higher
absolute profitability and further margin
improvement. Organic growth is to be
achieved by hiring talented brokers and
opening new offices to provide more
geographic coverage and access to
new clients.
In 2022, the board set an objective of
sustainably doubling the Group’s FY21
underlying operating profit of £8.9 million
by FY25. The Company has already
achieved this goal, two years early: the
year to 28 February 2023 saw strong
performances across the business,
driven by increased scale and favourable
market rates. In the year under review,
the increased resilience and balance
that we have built in the business was
evident. While market rates in some
areas were lower this year, fixture
numbers were up 8% on the prior year.
Braemar is led by an experienced board
and management team who each bring
a wealth of experience to the business
and together are well suited to execute
Braemar’s growth agenda. In FY24, not
only did the successful strategy achieve
a strong trading performance, but the
combination of the Group’s organic
growth, the acquisitions made in FY23
and the investment in the Group’s
Securities business, have yielded a
business that is increasingly resilient and
well positioned to deliver sustainable
profits through industry cycles.
With offices in 11 countries, including
the key locations of London, Singapore,
Melbourne and Athens, Braemar serves
its clients globally, across different
time zones and cultures, with a highly
diversified and complementary market
offering, covering a range of sectors,
including Tankers, Dry Cargo, Sale
& Purchase, Corporate Finance and
Offshore as well as a Securities business,
offering clients an increasing suite of
freight derivative and energy products.
The breadth and depth of Braemar’s
diversified product offering yields a
business that is more insulated against
specific market sector movements.
Braemar’s global teams have proven
track records for delivering expert
advice in Chartering, Corporate Finance,
Research and Analytics, Operations, and
risk management.
Braemar leverages its strong networks
to secure the best prices and
performance for our clients. In line
with our commitment to UN SDG 8.4
– decoupling economic growth from
environmental degradation, the Group
is promoting inclusive and sustainable
economic growth across the industry by
incorporating climate-smart expertise
into its client services. In April 2023,
the Group’s ESG efforts and future
commitments were recognised by
the Financial Times and Statista, who
named Braemar one of ‘Europe’s Climate
Leaders’. This title reflects the progress
Braemar has already achieved in
reducing its Scope 1 and 2 emissions.
Building
eResilience
Expert
Advise rs
Braemar Plc Annual Report and Accounts 2024
8
Business Model
Advise rs
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
9
Expert advisers
in investment,
chartering and
risk management
for the shipping
and energy
markets.
Our integrated teams deliver
creative solutions and tailored
support for customers around
the world, placing Braemar
at the forefront of the
shipbroking industry.
Investment Advisory:
Corporate Finance,
Sale & Purchase
The right vessels, at the
right price, at the right time.
Our team combines years
of commercial, financial,
technical and operational
expertise with the most
comprehensive market
analytics in the industry
to create investment
opportunities that are both
protected and maximised
for sustainable returns.
Complemented by our
Corporate Finance desk
which assists those facing
liquidity crunches with loan
portfolio pricing, management
and restructuring.
Chartering: Deep Sea
Tankers, Specialised
Tankers, Offshore and
Dry Cargo
Our traditional shipbroking
activity we deliver customised
chartering solutions built
around the specific needs
of our clients. By investing
in cutting-edge technology
and bespoke databases, our
brokers and analysts create
innovative strategies that
deliver long-term gains over
short-term fixes.
Risk Advisory: Securities
Volatile price movements are
commonplace in shipping
markets. Our Securities desks
help our clients manage their
exposure by providing access
to liquid marketplaces on an
agency basis.
Purpose
To leverage our expertise
and experience to secure
sustainable returns and
mitigate risk for our clients
in the volatile worlds of
shipping and energy.
How we operate
We offer an integrated
service from our experienced
brokers with specialised
areas of expertise supported
by a collaborative culture.
Management structure
Our team draws on a wealth
of diverse sector experience
to provide some of the most
advanced market intelligence
in the shipping industry.
Vision
To enable more prosperous,
secure and sustainable global
trade within the shipping and
energy industries.
Expertise
Information can empower
– but only when you know
how to use it. Our specialists
know exactly how market
intelligence can be applied to
give our clients the edge over
competitors.
Experience
We draw on in-depth
knowledge and a wide
breadth of coverage to
help clients navigate a
complicated landscape.
Values
We are committed to
proactive, measurable
Environmental, People, Social
& Governance (“EPSG”)
initiatives and the facilitation
of climate-smart shipping.
We set high standards for
our team and give them clear
frameworks and policies
within which to operate.
Collaboration
By sharing knowledge and
resources across the Group,
our team can anticipate our
clients’ needs and provide
prompt, informed solutions.
Who we are Why Braemar What we do How we operate
Evolve
Progress
10
Braemar Plc Annual Report and Accounts 2024
Our Strategy
Further details on what this means for our
business are as follows:
Facilitating Climate-Smart Shipping
Shipping will remain the most cost and energy efficient method to
transport freight for the foreseeable future. However, the industry is
cumulatively responsible for 3% of worldwide greenhouse gas emissions.
Braemar’s environmental footprint is a negligible percentage of the
shipping industry’s emissions. However, we work in an industry that is
not currently on course to meet its 2050 and ‘net zero’ commitments. As
an adviser, this presents a huge opportunity for us to provide access to
solutions that help our clients to achieve their sustainability ambitions.
We want to be a driver and influencer of that change, and invest further
to expand our sustainabilityoffering.
Progress
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
11
Our strategic priorities will enable us to take
advantage of future growth opportunities.
Neutralising our emissions
via carbon offsets
We recognise that there are steps
which we can take to remediate our
historical emissions from our operations.
Through Braemar Offset and our
partner, CHOOOSE, we have completely
offset our reported corporate carbon
footprint since 2017. We are pleased
to be continuing to invest in projects
which bring substantial benefits to
underprivileged communities, protect
fragile ecosystems, and create more
diverse and inclusive workforces.
Developing a ‘green’ mindset
As a business, we are committed to
reducing our carbon footprint and
playing our part in the shipping industry’s
drive to ‘net zero’. We are doing this by
becoming more energy efficient, making
greener commercial choices, and
incorporating sustainability into our client
services and our decision making at a
desk and Group level.
Providing access to voluntary
and mandatory emission
reduction solutions
We have solutions that enable our clients
to fulfil their voluntary ambitions, as well
as to ensure their full compliance with
the European Union’s ETS (“Emissions
Trading Scheme”).
Braemar Offset enables clients to fulfil
their voluntary sustainability ambitions.
In partnering with Braemar Offset,
companies can proactively play a role
in improving their green credentials and
help to accelerate climate action.
Our new Natural Gas derivatives desk
offers direct access to European Union
Allowances (“EUAs”). The EU ETS is
a cornerstone of the EU’s policy to
combat climate change, and from 2024
it will apply to ships calling at EU ports
above 5,000 GT transporting cargo or
passengers for commercial purposes.
Enhancing our renewables offering
We continue to grow our renewables
offering, as part of our overall growth-
orientated strategy. We are also
positioning the business to support the
transition to a low carbon economy and
for future growth in renewable energy
and low carbon fuels.
Helping our clients navigate new
regulations
Braemar sees ships throughout their
lifecycle, and this presents opportunities
for collaboration and value creation. We
see them when they start life on our
Newbuilding desk; through changes of
ownership via our Sale & Purchase desk;
as they voyage around the globe under
instructions from our Chartering desks;
and finally, as they reach the end of their
working lives, with our Recycling desk.
By working in partnership with our
clients, we use our expertise and
experience to maximise each vessel’s
potential, while minimising its aggregate
environmental footprint.
The rules which govern shipping
are increasing year-on-year and the
primary focus currently is environmental
improvement. Regulations, such as the
EU ETS, as well as major new technical
measures such as the Energy Efficiency
Existing Ship Index (“EEXI”) and the
Carbon Intensity Indicator (“CII”), are
changing the way ships trade and
making it much less viable to operate
inefficient ships. Across our Chartering
and Shipping Investment desks, we are
focused on helping our clients to ensure
that their assets and future investments
are cleaner, safer, and more productive.
Braemar Plc Annual Report and Accounts 2024
12
Group Chief Executive Officer’s
Statement
This is my third year
as Group CEO and I
am immensely proud
to announce another
strong performance for
the Company, following
the significant growth
that we achieved in
FY23. I am particularly
pleased with this
performance, as it
clearly demonstrates
that our strategy is
delivering, and our
business is becoming
increasingly resilient.
James Gundy
Group Chief Executive Officer
Group revenue for the year at £152.8
million, demonstrates our business
model in action. While revenue was
broadly unchanged from the prior
year (FY23: £152.9 million), strong
performances from the recent
acquisitions and our growing Securities
business offset cyclically weaker Dry
Cargo and Investment Advisory markets
and their associated revenues.
Revenue per head at £373,000 (FY23:
£398,000) remained strong, although
lower than the prior year due to the
investment in new headcount made
during the year.
A key focus during the year was
continuing to build a strong platform for
future growth. We continued to make
key hires, integrated the acquisitions
made in FY23 and invested in our
support functions, while continuing to
carefully manage our cost base. This
platform provides the right foundations
on which to deliver further growth in a
fragmented shipbroking market through
hiring and M&A.
Internal independent investigation
As mentioned in the Chairman’s
Statement, an internal independent
investigation was completed during
the year, ultimately focusing on a
small number of transactions from
2006 to 2013. A provision in relation
to these transactions was recognised
in the prior year Financial Statements.
Once again, I would like to thank the
Independent Investigation Committee
for overseeing the process, and our
clients and shareholders for their
patience and understanding, during
this period. Braemar and its people
showed considerable strength and
focus throughout this, and I thank all
our employees for their hard work
throughout the process.
Delivering resilience through
diversification
Our objective over the medium term
has been to sustainably double the FY21
underlying operating profit of £8.9 million
by FY25. We have achieved this in both
FY23 and FY24, although with noticeably
different revenue mixes. FY23 saw strong
performances across all areas of the
business, whereas FY24 illustrated the
increased resilience and balance that we
have built across the business through
acquisition and investment.
While overall revenue in FY24 was the
same as the prior year, the underlying
mix changed. Dry Cargo rates were
cyclically quieter resulting in revenue
38% lower than the prior year and our
Investment Advisory division was 30%
lower. This, however, was offset by the
strong contributions from our newly
acquired businesses, with Tankers
increasing 31%, Specialised Tankers
increasing 18%, Offshore increasing
44% and Securities increasing by
36%. This clearly illustrates that our
strategy to diversify across shipbroking,
build a complementary Securities
business is delivering a more balanced
business, better able to generate strong
performances throughout the cycle.
Importantly, while we cannot control
shipping market rates, we can focus
on growing our market share and we
increased total fixture numbers by 8%
during the year.
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
13
Markets
With the global fleet continuing to age
and newbuilds continuing to remain
low by historical standards, the markets
remained strong for much of the year.
This was further impacted by geo-
political and natural events, resulting
in longer routes being needed and
squeezing supply further. Dry Cargo was
the exception with average rates being
35% lower than the prior year, partly
due to reduced COVID restrictions and
improving efficiencies in Chinese ports.
Global trade levels continued to grow,
up approximately 2% year on year and
the global fleet continued to remain at a
similar level with limited numbers of new
vessels, putting a floor under rates.
Investing in our EPSG
We remain committed to delivering
sustainable growth and value to our
shareholders, while contributing to the
communities and environments in which
we operate, and I am proud of the
positive impact that we make.
Our sustainability strategy focuses on
minimising our environmental impact,
encouraging diversity and inclusion
through our hiring and development
programmes, and supporting local
initiatives that drive positive change.
While shipping is an efficient method
of transporting goods, it is critical that
there is a strong focus on reducing its
environmental impact and we work
closely with our clients, helping them
towards this, advising on the developing
alternative fuels, new regulations and
emission offset solutions.
£373,000
average revenue per employee
11.2bn
tonnes
2023 estimated seaborne trade
Outlook
The strong performance during the
period clearly demonstrates that the
Group’s strategy is delivering as our
selective acquisition and hiring of
talented individuals are improving the
Group’s resilience, maintaining revenues
and growing market share.
During the year, we made further
investment to enhance our platform,
ensuring that we can continue to scale
the business and improve our operating
margins in future years. This investment
will continue in FY25 as we make further
improvements to our IT infrastructure,
replacing legacy technologies to create
significant efficiencies going forward.
In 2022, we stated our objective was to
sustainably double underlying operating
profit by FY25. We achieved this in FY23
and FY24 and we remain on track to
continue to deliver this, with further
growth through acquisitions and hires in
existing and new markets.
As we entered FY25, the Group had a
forward order book of $83 million, 47%
up on the prior year with particularly
strong growth in Sale & Purchase. The
outlook for rates is also positive so we
remain optimistic for the future and
continuing to successfully execute our
growth-focused strategy.
I would like to take this opportunity to
thank our employees for their hard
work and dedication, as well as our
clients and partners for their ongoing
support, which combined to deliver
this year’s strong result. I look forward
to another successful year in FY25 and
to executing our growth strategy and
continuing to deliver exceptional results
for all our stakeholders.
James Gundy
Group Chief Executive Officer
22 May 2024
Braemar Plc Annual Report and Accounts 2024
14
Focus
Future
An interview with Group Chief
Executive Officer James Gundy, Group
Chief Operating Officer TrisSimmonds
and Group Chief Financial Officer
Grant Foley. They answer some of your
frequently asked questions.
Q&A with management
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
15
Q
A
What does Braemar offer its clients?
JG: We are a global business, with 16
offices in 11 countries, our teams are
highly experienced, and we have
access to data and intelligence that
provides real value to our clients.
Also, as a business listed on the London
Stock Exchange, we give our clients
confidence that they are dealing with
a strong and reputable broker.
Q
A
How do you work together as an
executive team?
JG: We constantly talk to one another,
so we are all aware of what is happening
around the Group, the industry and the
markets. Furthermore, we know each
other’s strengths, this allows us to be a
highly effective executive team. I have
been in the industry for over 40 years
so understand it from top to bottom,
Tris has been a broker and understands
shipping and securities so is focussed
on growth both through hiring and
acquisitions. Grant brings significant
experience on scaling businesses
successfully for growth. Crucially, we
challenge one another.
Q
A
The Securities business has grown
strongly, where can this go?
TS: James and I had a clear vision for our
Securities business. I sold my business
to Braemar in 2018 and this was the
catalyst for our Securities business.
Since then, we have added different
products, most recently natural gas and
oil. This part of the business has grown
by 93% over the last 3 years and there
are a number of other areas that we
can drive future growth by product and
geography. Securities accounted for
15% of revenue in FY24 and during FY25
we are establishing Organised Trading
Facilities in the UK and Europe that will
drive future growth. Importantly, we are
a broker, we take no balance sheet risk,
so our Securities business is very capital
light. I believe that Securities can double
over the next three to four years.
As a management
team we have a clear
and aligned vision to
grow our business.
James Gundy, Group CEO
Q
A
What do you mean when you talk
about a platform for growth?
GF: As we continue to grow, it is crucial
that we have the right infrastructure
to allow brokers that join the business
or acquisitions to focus on servicing
clients. We have invested in our support
functions (finance, compliance, IT, HR)
to ensure that is the case, and ensuring
that, as the businesses scales, these
functions are well positioned to support
that growth. This will improve our
margins as we go forward.
Q
A
Where do you see growth coming
from?
TS: We see growth coming from three
areas, leveraging our market position
to continue to gain market share, build
new desks and teams through hiring
and finally strategic acquisitions. When
we look at hiring individuals, we want
to ensure that being part of Braemar
means that they can grow rather than
maintain the level of business. This
comes back to ensuring that we have
the right platform in place. When it
comes to acquisitions, we are looking
to ensure that once a business comes
into the Group it can fully leverage our
data, intelligence and other desks to
really grow the business. Our acquisitions
of Southport Maritime Inc. and the
Madrid Tanker Desk have been excellent
examples of this.
Q
A
What is Braemar doing from an
ESG perspective?
GF: Braemar is a people business, so
we have added people to form EPSG.
Braemar has two roles to play when it
comes to the environment: helping our
clients understand how they can make
voyages more environmentally friendly
through alternative fuels or new more
efficient vessels, and how they can offset
their carbon footprint. While internally we
are moving forward to reduce our impact
through recycling, being more energy
efficient and offering our employees
electrical vehicle schemes. However, we
have more to do in this area.
During the year, we have continued to
make charitable donations to a wide
variety of employee-selected charities
and we have sought to diversify our
workforce through our trainee broker
programme and apprenticeship
schemes. From a people perspective,
we have rolled out training and offer our
employees access to a number of health
and well-being plans.
Q
A
You set a target to double underlying
profit by FY25, haven’t you done that?
JG: Yes, but our target was to deliver
sustainable profits of not less than
£18 million by FY25. In FY23 we saw
the benefits of our simplified strategy
and strong rates and activity across
all sectors, which delivered underlying
operating profit of £20 million. Shipping
is inherently volatile with different sectors
typically being at different points in the
cycle, that is what we saw this year.
Weaker performances in some sectors
offset by our more resilient business and
delivering £18 million. We are building a
resilient business that can deliver £18
million, wherever we are in the cycle.
Q
A
How do you retain people in the
Company?
JG: Braemar has an active policy of
promoting people and creating clear
career progression. In the last five years
we have appointed new business heads
in three departments and have opened
new offices and moved existing staff to
grow new markets and business lines. We
pay our brokers using a clear formula that
gives them transparency on their earnings
and offer a full suite of employee benefits.
In non-broking areas we aim to promote
from within and provide training and
development opportunities.
Solid
Foundations
Braemar Plc Annual Report and Accounts 2024
16
Key Performance Indicators
The performance of our business was
strong, with revenue and profit in line
with the board’s expectations.
The strategy of focussing on Shipbroking
and building our Securities business
is producing a stronger business,
generating sustainable returns for our
shareholders as well as superior service
and value for our clients.
Revenue was unchanged year on
year. Our Chartering and Risk Advisory
segments grew year on year. This,
however, was offset by lower Investment
Advisory revenues.
All KPIs relate to continuing operations.
Braemar continued
to trade well
throughout FY24.
Solid
Foundations
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
17
2024
2023 £22.1 million
2024 409
2023 384
2024 £373,000
2023 £398,000
2024 £152.8 million
2023 £152.9 million
£5.2 million
2024 11
2023 12
2024 15.65 pence
2023 15.85 pence
-1%
Reported EPS
15.65p
2023: 15.85p
+8%
2024 13 pence
2023 12 pence
Full-year dividend
per share
13p
2023: 12p
2024 16
2023 17
Number of offices
16
2023: 17
2024 36.62 pence
-21%
2023 46.22 pence
Underlying EPS
36.62p
2023: 46.22p
Revenue
£152.8m
2023: £152.9m
-%
Number of employees
(average across the year)
409
2023: 384
+7%
2024 £16.5 million
2023 £20.1 million
Underlying
operatingprofit
£16.5m
2023: £20.1m
-18%
Revenue per head
£373k
2023: £398,000
-6%
Cash generated
fromoperations
£5.2m
2023: £22.1m
-76%
Number of countries
11
2023: 12
Meeting
Demand
18
Braemar Plc Annual Report and Accounts 2024Braemar Plc Annual Report and Accounts 2024
Market Review
and Outlook
Meeting
Demand
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
19
During FY24, many shipping markets continued
to perform well, with the exception of Dry Cargo
that saw weaker rates through much of the year.
Earnings across the Container, Gas, Offshore and
Tanker markets remained strong for much of
the year.
Looking ahead, we remain cautiously
optimistic, sentiment in the short and
medium term, as measured by time
charter rates, continues to be broadly
positive, and the vessel supply and
freight demand pictures for the shipping
markets look promising in our two
biggest markets – Tankers and Dry
Cargo – over the foreseeable future.
Although the global order book has
increased slightly, it continues to remain
low by historic standards and there
continues to be limited capacity in the
yards, leading to a shortage of supply and
continuing high second-hand and new-
build prices. These factors are expected
to result in rates remaining strong.
In addition, sanctions, geopolitical and
natural events are leading to longer
voyage distances and this is likely to
increase ahead of a stricter regulatory
environment and an increased focus
on ESG-criteria for investments. Longer
voyages lead to higher freight costs and
higher commissions for the Group.
We now present a FY24 summary of our
three business segments: Investment
Advisory, Chartering, and Risk Advisory.
Insight
Expertise
Braemar Plc Annual Report and Accounts 2024
20
Investment Advisory
Corporate Finance – £2.2 million
(FY23: £4.7 million)
Corporate Finance revenues at £2.2
million were 54% lower than the prior
year, due to fewer mandates completing,
particularly on the debt restricting side.
The continuing strong shipping markets
led shipowners further increasing
their cash reserves, making them less
dependent on sourcing debt financing.
In addition, the increase in base interest
rates over the previous years from
historic lows has made it unattractive
for many shipowners to source debt
financing as opposed to deploying
their cash reserves. Instead of looking
to secure new debt financing, many
shipowners have even used part of their
cash reserves to repay or prepay existing
financing facilities.
Notwithstanding the challenging
circumstances, several financings were
arranged, especially for Asian and Middle
Eastern clients. In addition, corporate
finance’s mandates diversified during
the year and several transactions in
the container, tanker and multipurpose
markets were concluded. Furthermore,
M&A activity and the interest from clients
in M&A transactions has continued to
pick up further.
Sale & Purchase/Newbuildings –
£23.5 million (FY23: £32.1 million)
Sale & Purchase revenues were £23.5
million, a decrease of £8.5 million (27%)
on the previous year. The tanker market
remained active during the year and
strong rates being offered by charterers
to secure tonnage for long periods
have supported asset prices. With
newbuilding berths generally only being
available from 2027 onwards, further
liquidity entered the second-hand
market. In addition, new regulations
have led clients to continuously re-
evaluate their fleet composition, with a
constant need for renewal. As a result,
through the year we saw many clients
reshuffling their fleet, with the majority of
owners looking to sell their 15-year-old
vessels and replacing these with more
environmentally efficient ships.
The desk enters the new financial year
with a strong forward order book, more
than double from the start of the prior year.
Investment Advisory’s
revenue decreased by
30% to £25.7 million
(FY23: £36.8 million),
representing 17% of the
Group’s revenue.
Operating Review
Insight
Expertise
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
21
Chartering
Dry Cargo – £22.1 million
(FY23: £35.8 million)
Dry Cargo revenues decreased by 38%
to £22.1 million (FY23: £35.8 million)
due to a fall in rates during the year.
Despite Seabourne dry bulk estimated
to have grown by 5% in 2023 led by
coal and iron ore trade, and the fleet
growing by just 2.7%, below the long-
term average of 3.5%, rates were under
pressure during the year due to greater
efficiencies in Chinese ports and the
removal of COVID-related restrictions.
Overall, dry bulk trade growth is
expected to slow in the coming year,
along with slower growth in the fleet,
together with fleet inefficiencies as a
result of diversions from the Red Sea
and Panama Canal which create the
potential for rate volatility.
Chartering’s revenue
increased by 5% to
£103.9 million from
£99.2 million in FY23,
representing 68%
of Braemar’s total
revenue. Fixture
volumes increased by
8% compared with the
previous year.
Tankers – £54.7 million
(FY23: £41.6 million)
Tanker revenue grew by 31% to £54.7
million (FY23: £41.6 million), with the
acquisitions made in the previous
year of Southport Maritime and the
Madrid Tanker desk making significant
contributions to revenue. FY24 was
another positive year within the Tanker
sector with all markets performing well,
and a larger appetite for long term deals
as confidence continued and rates
stabilised. Strong global oil demand
growth combined with trade distortions,
as a consequence of the conflicts in
both Ukraine and Gaza are expected to
hold rates firm.
Braemar Plc Annual Report and Accounts 2024
22
Operating Review
continued
Offshore Energy Services –
£7.9 million (FY23: £5.5 million)
Offshore revenues grew to £7.9 million
in the year, up 44% from the prior year
(FY23: £5.5 million). The continuing
low level of supply in the market, a
strong oil and gas sector, as well as the
growing offshore wind industry, drove an
improvement in rates during the year. The
desk’s forward order book remains strong
and outlook for the year ahead is positive.
Specialised Tankers – £19.2 million
(FY23: £16.2 million)
Specialised Tankers revenue at £19.2
million was £3 million (18%) higher than
the prior year (FY23: £16.2 million). The
continuing shortage of ships resulted in a
strong market throughout the year. With
a combination of firm demand, a lack
of new building ‘slots’ in shipyards, and
an ageing fleet of stainless-steel ships,
rates are expected to remain firm in the
coming years.
LNG*
Record numbers of LNG newbuildings
are set to deliver this year and next,
against delayed new LNG production,
create a bearish sentiment in the LNG
spot market for the coming 24 months.
Conversely, for the long-term, the yards
are now effectively booked up until
2028, meaning we do not expect to see
a reduction to the current record New
Building price highs, much before end of
the decade at the earliest. This presents
real challenges and continued bullish
sentiment for other market users seeking
to secure new Tonnage before then,
in terms of available slots and resulting
long-term charter rates.
Chartering
continued
LPG & Petrochemicals*
The Petrochemical segment had a
strong year, with increasing demand
from the U.S. combined with new
production elsewhere. The Pressurised
segment had another solid year with
improved results from both spot and
time charter coverage.
Braemar’s LPG & Petrochemicals desk
has enhanced its presence with the
recruitment of an established product
broker, and this segment is already
proving fruitful. The desk has increased
its time charter coverage and continues
to grow its customer base with a
number of new accounts.
Prospects for the Very Large Gas
Carrier (“VLGC”) freight market look
positive, despite the spot market
correction in January 2024. The spot
market remains increasingly volatile
with less consolidation of controlled
vessels. Demand and rates, however, are
expected to rise for the balance of the
new financial year. Despite the current
forward order book of approximately
25% of the existing fleet, much will not
hit the water until 2027.
Similarly, in the Medium Gas Carrier
(“MGC”) market, the outlook remains
good; mostly due to the projected
expansion in liquid ammonia shipments
in the near to long-term helping both
VLGCs & MGCs.
* LNG and LPG & Petrochemicals are
subsets of Specialised Tankers.
Revenue – Chartering
£103.9m
FY23: £99.2m
+5%
Strategic Report Governance Financial Statements
23
Braemar Plc Annual Report and Accounts 2024
Risk Advisory’s revenue
increased by 36% to
a record £23.1 million
(FY23: £17.0 million) and
now represent 15% of
total revenue.
Braemar’s Securities business
consists of four derivatives markets:
Dry Cargo FFA, Natural Gas, Oil,
and Tanker FFA.
Dry Cargo Derivatives
The dry freight derivatives market has
continued to garner increasing attention
from investors and participants beyond
the traditional freight hedging space.
As a result, trading volumes have seen
a substantial increase. Concurrently,
geopolitical tensions and weather-
related disruptions have contributed to
a rise in average freight rates across the
sector. The dry FFA desk has been able
to effectively capitalise on this growth in
trading volumes, which has translated into
a significant increase in revenues for the
year. This performance has been further
bolstered by the desk’s proprietary pricing
platform, braemarscreen.com, which
continues to provide unique insights to
market participants.
The Coal desk maintains its position as
the leading provider of brokering services
to the European-delivered ARA market,
which is used to benchmark the key API2
instrument. This is the most traded coal
futures contract globally.
Natural Gas Derivatives
The Natural Gas desk continued its
first full year of trading with continuous
quarter-on-quarter growth throughout
the year, with revenue growth coming
from successful client onboarding and
new product development. This was
achieved despite the reduced market
volatility in key gas hubs such as TTF,
due to a mild winter and strong storage
levels. In addition, the desk successfully
brokered several deals on European
Union Allowances (“EUA”) to help the
Group’s shipping clients prepare and
comply with the EU’s Emissions Trading
System (“ETS”). Looking forward,
the desk plans to continue organic
revenue growth through the hiring of
key personnel in both the options and
emissions space.
The desk also won the coveted Risk
Awards Newcomer of the year award
which reflects the team’s progress
and success in establishing a market
presence in its first full year of trading.
Oil Derivatives
The crude and products markets have
had a volatile run, albeit in a historically
tight price range, with bullish geopolitical
headlines competing with bearish macro
fundamentals and plentiful supply. Trading
volumes have steadily increased over the
course of the year, though still remain
lower than pre-Covid levels. Despite no
direct supply impact, the Israel/Hamas
conflict initially panicked the market, with
both crude and product cracks rallying
significantly. However, this geopolitical
premium has largely dissipated now,
with market focus returning to the
disappointing macro picture.
Ongoing OPEC+ voluntary cuts
have helped bring global petroleum
inventories back towards the five-year
seasonal average, but in the face of a
disappointing demand picture refined
product cracks have continued to
languish near multi-year lows, resulting
more recently in significant refinery run
cuts globally. As the global macro picture
continues to improve, and prices break
out of the current range, we expect
trading volumes to continue to pick up
across oil derivatives significantly.
Tanker Derivatives
The Tanker FFA market was extremely
volatile yet again throughout 2023, with
volumes up 15% across FFA routes. This
was primarily a result of the continued
Russia-Ukraine conflict along with further
increased geopolitical tensions, notably
Israel-Gaza. The Tanker FFA market is
expected to continue to grow in 2024,
and the desk remains the leading global
facilitator in Clean, Dirty & LPG FFAs.
Risk Advisory
(Securities)
Revenue – Risk Advisory
£23.1m
FY23: £17.0m
Braemar Plc Annual Report and Accounts 2024
24
Financial Review
Grant Foley
Group Chief Financial Officer
Revenue
Revenue from continuing operations was
broadly unchanged from the prior year,
while fixture numbers increased by 8%.
Overall chartering revenue grew by 5%
to £103.9 million. All sectors grew year
on year with the exception of Dry Cargo,
where rates were c.35% lower than the
prior year. Market share, however, was
maintained with Dry Cargo fixtures
only down slightly by 4%. Investment
Advisory revenue was £11.1 million, 30%
lower than FY23 due to fewer debt
restructuring mandates and lower
activity in Sale & Purchase, while Risk
Advisory (Securities) grew strongly once
again, up 36% on the prior year at
£23.1 million (FY23: £17.0 million).
Operating costs
Operating costs at £134 million were
£1.4 million higher than the prior year
(FY23: £132.6 million). Staff costs were
£0.6 million lower than the prior year,
offset by ongoing investment in IT,
the ongoing costs associated with
the acquisitions made in the prior year,
and the foreign exchange loss of
£1.1 million compared to a £1.5 million
foreign exchange translation gain in
the prior year.
Central costs
Central costs decreased by 19% from
£6.2 million to £5.0 million, primarily due
to lower share-based payment charges
than the prior year and lower legal and
professional fees.
Net finance costs
Net finance costs for the year decreased
by £0.7 million to £1.5 million (FY23: £2.2
million). Interest payable on the Group’s
revolving credit facility increased to £2.4
million from £1.2 million in the prior year
due to the average interest rate rising
from 4% to 7%. This was offset by interest
income increasing by £0.4 million as the
Group was able to get better returns on
cash balances and credits on derivative
contracts of £0.6 million that were a
charge of £0.5 million in the prior year.
The majority of the Group’s revenue is
earned in US dollars and the exchange
rate moved from a low of $1.18/£1 to
a high of $1.31/£1 during the year.
Total USD revenues at $189 million
were slightly lower than the prior year
(FY23: $191 million).
At 29 February 2024, the Group held
forward currency contracts to sell $119
million at an average rate of US$1.25/£1.
The Group delivered a robust financial performance for FY24, maintaining revenues
at the same level as the prior year against a backdrop of weaker Dry Cargo rates
and lower demand for Investment Advisory services. These were offset by improved
performances from other desks, strong contributions from the recent acquisitions,
and the continuing growth of our securities business, clearly illustrating the Group’s
growing resilience through the shipping cycle.
Underlying profit before tax at £14.6 million is £3.4 million lower than the prior year due
to £1.5 million of acquisition-related costs and foreign exchange translation losses of
£1.1 million (FY23: gain of £1.5 million).
The Group maintained a positive net cash position and, in line with the Group’s stated
progressive dividend policy, recommends a final dividend of 9p, making the full-year
dividend 13p, an increase of 8% on the prior year (FY23: 12p).
Summary Income Statement FY24
– Underlying operating profit £16.6 million (FY23: £20.1 million).
– Underlying operating profit (before acquisition-related expenditure £18.1 million
(FY23: £20.1 million).
– Underlying profit before tax £14.6 million (FY23: £18.0 million).
– Statutory operating profit £9.0 million (FY23: £11.7 million).
– Statutory profit before tax £7.5 million (FY23: £9.5 million).
Underlying Statutory
FY24
£’000
FY23
£’000
% inc/
(dec)
FY24
£’000
FY23
£’000
% inc/
(dec)
Revenue 152,751 152,911 – 152,751 152,911 –
Operating profit 16,548 20,075 (18)% 9,044 11,669 (22)%
Profit before tax 14,608 18,040 (19)% 7,523 9,451 (20)%
Profit after tax 10,820 13,399 (19)% 4,624 4,596 1%
Earnings per share 36.62p 46.22p (21)% 15.65p 15.85p (1)%
A more diversified revenue mix
across shipbroking, building
increasing resilience.
Strategic Report Governance Financial Statements
25
Braemar Plc Annual Report and Accounts 2024
+8%
Growth in fixtures
36.62p
underlying earnings per share
Braemar Plc Annual Report and Accounts 2024
26
Financial Review
continued
A more diversified
revenue mix across
shipbroking, building
increasing resilience.
Grant Foley,
Group Chief Financial Officer
Borrowings and cash
At the Balance Sheet date, the Group
had a revolving credit facility with HSBC
of £30.0 million. The facility also provides
access to a global cash pooling facility
in the UK, USA, Germany and Singapore,
which enables efficient management of
liquidity between its main regional hubs.
At the end of the year, the Group had net
cash of £1.0 million (FY23: £6.9 million).
Retirement benefits
The Group has a defined benefit pension
scheme, which was closed to new
members during FY16. The scheme has
a surplus of £1.4 million (FY23: surplus
£1.1 million), which is recorded on the
Balance Sheet as at 29 February 2024.
The agreed annual scheme-specific
funding, since the triennial valuation as at
March 2020, was a cash contribution of
£0.5 million per annum. As a result of the
net asset position, these contributions
were stopped from March 2023.
Taxation
The Group’s underlying effective tax rate
in relation to continuing operations in
FY24 was a charge of 26% (FY23: 26%),
slightly higher than the UK corporation
tax rate reflecting the international
operations of the Group.
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.
Balance Sheet
Net assets at 29 February 2024 were
£79.6 million an increase of £2.9 million
from the prior year (FY23: £76.7 million).
The year saw an overall decrease on
total assets of £16.5 million, primarily due
to a reduction in trade receivables (£5.6
million) and cash (£6.8 million). This was
offset by a reduction in total liabilities
of £19.4 million, due to lower trade and
other payables, primarily due to a lower
bonus accrual at the year-end, as some
bonuses were paid before the end of the
financial year.
Following the completion of the internal
independent investigation, a provision for
uncertain commission obligations was
recognised in the prior year Financial
Statements. This provision remains as at
29 February 2024.
Specific items
Alternative profit measures (“APMs”)
Braemar uses APMs as key financial indicators to assess the performance of the
Group. Management considers that the APMs used by the Group help to provide
an alternate assessment of business performance, by excluding items which
management does not believe relate to business performance in the period and
provide useful information to investors and other interested parties. 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.
Items that are not considered to be part of the ongoing trade of the Group have
been presented as specific. These items are material in both size and/or nature and
we believe may distort understanding of the underlying performance of the business
if not identified separately. Details of these items can be found in Note 2.2 to these
FinancialStatements.
FY24
£’000
FY23
£’000
Underlying operating profit before specific items 16,548 20,075
Specific items – Acquisition-related expenditure (4,405) (1,999)
Specific items – Other operating costs (3,182) (10,253)
Specific items – Other income 83 3,846
Operating profit 9,044 11,669
Acquisition-related expenditure includes £3.6 million in relation to the acquisition of
Southport Maritime Inc. (FY23: £1.3 million) and £2.6 million within other operating
costs that are the costs associated with the independent internal investigation
conducted during the year (FY23: £nil). In the prior year, other operating costs
included a goodwill impairment of £9.1 million in relation to the Group’s Corporate
Finance business.
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
27
ESOP Trust
During FY24, the Company requested
that SG Kleinwort Hambros Trust
Company (CI) Ltd, as Trustee of the
Company’s ESOP Trust, purchase shares
in Braemar Plc. During the year, a total of
2,156,196 shares in the Company were
purchased by the Trustee and 3,440,115
shares were released; as a result, at 29
February 2024, the ESOP held 2,303,211
shares (FY23: 3,579,630 shares). The
total cash outflow as a result of these
share purchases was £6.1 million (FY23:
£8.0 million). At 29 February 2024, the
ESOP contained sufficient shares as
are expected to be needed to cover all
current share awards described in Note
6.3 of the Financial Statements.
Dividend
The directors are recommending for
approval at the AGM on 3 July 2024, a
final dividend of 9.0 pence per share,
to be paid on 9 September 2024. The
total dividend of 13.0 pence for the year
is covered 2.8 times by the underlying
earnings per share from continuing
operations of 36.62 pence. The total
cash outflow in respect of dividends paid
during the year ended 29 February 2024
was £2.4 million (FY23: £3.2 million).
Going concern
With the trading cash flows generated
during the year, the Group remains in
a robust cash position, with a positive
net cash position at the year-end. The
Group will maintain its prudent approach
to working capital forecasting and credit
controls. The Group’s revolving credit
facility was renewed in November 2022
on largely similar terms to the previous
one it replaced and provides the
seasonal working capital that is required.
Accordingly, the accounts have been
prepared on a going concern basis.
Grant Foley
Group Chief Financial Officer
22 May 2024
Braemar Plc Annual Report and Accounts 2024
28
Section 172 Statement
The board is pleased to confirm that
during the year ended 29 February
2024, the directors have discharged
their duties to act in a way they believe
promotes the long-term success of the
Company for the benefit of its members
as a whole. This statement sets out how
the directors have done this while having
regard to the matters set out in section
172 of the Companies Act 2006.
The board is responsible for ensuring
that the principal decisions it takes
promote Braemar’s long term success
for its members, and in doing so, they
must have regard to the:
– likely consequences of any decision in
the long term;
– interests of the Company’s employees;
– need to foster the Company’s
business relationships with suppliers,
customers and others;
– impact of the Company’s operations on
the community and the environment;
– desirability of the Company
maintaining a reputation for high
standards of business conduct; and
– need to act fairly as between
members of the Company.
The board has determined the
Company’s key stakeholders are its
employees, clients, shareholders and
banking partners. The views of these
stakeholders are considered by the
board when principal decisions are
taken. The board understands the
importance of effectively engaging
with the Company’s key stakeholders,
to better understand their views and
interests, and to better consider the
potential impact of the directors’
decisions on them. Information on
how the Company engaged with various
stakeholders during the year can be
found in the EPSG Report on pages 30
to 41 and the Corporate Governance
Report on pages 50 to 53 of this
Annual Report.
The directors’ duties under Section 172 of the Companies Act 2006 are embedded
in all the decisions that the board and its Committees make, as are a range of other
factors, including alignment with the board’s strategy and values. A summary is
provided below of the principal decisions taken by the board during the year and how
key stakeholders and other matters set out in section 172 were considered by the
board in making these decisions:
Principal decisions of the board:
Decision Section 172 and stakeholders
Approval of interim dividend of 4
pence and recommended a final
dividend of 9 pence per share for
approval by shareholders at the
2024 AGM
• consequences of decisions in the long term
• interests of stakeholders: shareholders
• the need to act fairly as between members
of the Company
Establishment of an independent
Investigation Committee chaired by
the non-executive Chairman
• consequences of decisions in the long term
• reputation for high standards of business
conduct
• interests of all stakeholder groups
Appointments to the board • consequences of decisions in the long-term
• reputation for high standards of business
conduct
• interests of all stakeholder groups
Establishment of Braemar Securities
Limited, Singapore branch
• consequences of decisions in the long-term
• interests of all stakeholder groups
Board decision making in action
Approval of interim dividend of 4
pence and recommended a final
dividend of 9 pence for approval by
shareholders at the 2024 AGM
In November 2023, the board approved
an interim dividend of 4p per share in
respect of the year ended 29 February
2024, which was paid on 2 April 2024
reflecting strong underlying performance
and the board’s confidence in the
outlook for the Company. The payment
was in line with the Group’s stated
progressive dividend policy. When
approving the dividend, the board
considered the level of reserves and
the Company’s capital position, future
investment and growth opportunities
and ability to generate cash flows.
In early 2024, the board agreed to
recommend a well-covered final
dividend of 9 pence per share for
approval at the forthcoming AGM. The
board is mindful of the importance
of dividends to shareholders and this
decision is in line with the Company’s
stated progressive dividend policy.
Together with the interim dividend of 4
pence per share, this equates to total
dividends per share for the year of 13
pence, an 8% increase over the prior
year dividend of 12 pence per share.
The directors had regard to the interests
of shareholders and the impact on the
Company’s long-term growth strategy.
Establishment of independent
Investigation Committee
An area of board focus over the past
few years has been ensuring that proper
procedures are in place to deliver good
practice throughout the business as it
scales. As part of this work, in June 2023,
the board established an independent
investigation committee to oversee an
internal independent investigation into
an historical transaction dating back to
2013. The investigation was overseen
by an Investigation Committee, chaired
by the non-executive Chairman and
solely comprising the independent non-
executive directors. The investigation
was conducted by FRP Advisory
Trading Limited, an independent
specialist forensic accounting firm, and
independent external counsel. The
directors had regard to the interests of
all stakeholder groups and the need for
the Company to maintain high standards
of business conduct as well as the
impact on the Company’s long-term
growth strategy. The investigation was
completed in October 2023. The board
and the Group have acted promptly
to address the process and control
areas that were identified as requiring
improvement, including taking key
remedial actions. The publication of the
FY23 Annual Report was delayed until
the completion of the investigation.
Strategic Report Governance Financial Statements
29
Braemar Plc Annual Report and Accounts 2024
As the Company was not able to comply
with the Financial Conduct Authority’s
Disclosure and Transparency Rules, the
Company requested that trading in the
Company’s shares be suspended and
this was effective from 3 July 2023 until
21 November 2023 when trading in the
Company’s shares resumed. The work of
the Investigation Committee is testament
to the board’s strong commitment to
maintaining a high standard of corporate
governance which is in the interests of all
the Company’s stakeholders.
Appointments to the board
In May 2023, the board appointed
Cat Valentine as an independent
non-executive director. In considering
the optimum criteria and attributes for
this role, the Nomination Committee
considered the existing structure
and diversity of the board and
senior management, the culture of
the organisation and the focus of
the Group’s future strategy. Cat is a
communications professional with over
25 years’ experience, advising quoted
and privately-owned companies on
investor and corporate communications.
She has extensive knowledge of the
small-cap growth companies’ market
and considerable M&A transactional
experience, having advised a broad
range of clients on both AIM and the
Main Market. Cat’s extensive experience
has added considerable value to the
board. On Cat’s appointment to the
board, she was also appointed to the
Remuneration Committee and Audit &
Risk Committee.
Grant Foley joined the Group as Group
Chief Financial Officer on 1 August
2023. Grant brings more than 25 years’
experience in leading public and private
financial services and technology
businesses, and joined the Company
from ClearScore, the UK’s leading credit
marketplace, where he served as Chief
Financial Officer. At ClearScore, Grant
drove significant improvements across
the finance function, implementing new
systems, processes and reporting as
the business scaled. Experience the
board considered would be invaluable
to Braemar as the business pursues
its growth strategy and as the finance
functions continues to strengthen.
Grant also brings additional transaction
experience to the board, and his other
roles have included CMC Markets
Plc where, as Group Chief Financial
Officer and Chief Operating Officer,
he was instrumental in the company’s
successful IPO.
Establishment of Braemar
Securities Limited, Singapore
branch
In February 2024, the Group established
a branch of Braemar Securities Limited
(the Group’s commodity and commodity
derivatives business for professional
clients) in Singapore. The directors had
regard to the interests of all stakeholder
groups: employees, clients and
shareholders. Our Securities business
is a key component of our growth
strategy and investing in this
business is an area of focus for
the Group.
The Securities business is growing
(revenue was up 36% in FY24) and our
strategy is delivering a more balanced
business that is better able to generate
strong performances throughout the
cycle. Group Chief Operations Officer Tris
Simmonds details the growth and future
prospects of the Securities business in
the Executive Q and A on page 15.
30
Braemar Plc Annual Report and Accounts 2024
Positive
At Braemar, we are
committed to being a
sustainable business,
delivering growth while
creating a positive
impact on society.
We are a people-focused Company,
without whom we would not have a
profitable and sustainable business. It is
why we have People included within the
title of our ESG strategy; to demonstrate
the importance we place on our people
and to ensure their continued growth
and success as part of our business.
Environmental, People, Social and Governance
(“EPSG”) Report
Impact
With the complex
issues the world faces
ever more present in
our lives, our EPSG
strategy remains well
placed to help us
help our clients and
employees navigate
the future with
confidence.
Grant Foley,
Group Chief Financial Officer
and EPSG executive sponsor
As a business within an industry
responsible for approximately 3% of the
world’s GHG emissions, we recognise
that we have an important part to play
in helping the industry with the green
transition. We remain true to our EPSG
purpose to facilitate climate-smart
shipping and discuss how we are doing
that throughout our report.
Ensuring effective governance and
managing the business ethically is a
guiding principle for Braemar and the
Group is committed to maintaining
the highest standards of corporate
governance. Throughout the year,
we have strengthened our governance
processes, specifically improving
our internal audit, risk, legal and
compliance functions.
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
31
We have taken time to set our foundations to position ourselves well to deliver our EPSG strategy. Going forward, we will start to
deliver on activities to reach the commitments we have made to reach our ambitious goals.
1
2
3
4
5
Purpose
ESG
Objective
SDG
Commitments
EPSG
Resources
EPSG
Goals
We believe it takes expertise and experience to
secure sustainable returns and mitigate risk in
avolatile shipping world
Facilitating climate-smart shipping
People Profit Client Offering Value Chain
Giving our people’s
time, passion and
expertise to benefit
society and the
environment.
Giving a percentage
of our profit to
support our ESG
work.
Incorporating
climate-smart
expertise into our
client services.
Collaborating with
the marine industry
to achieve shared
ESG goals.
Targets: 6.3, 6.6 Targets: 8.4, 8.6 Targets: 13.3 Targets: 14.1, 14.2
Environment People Society Governance
Reduce operational
emissions. Achieve
net zero emissions
by 2050.
Protect 10,000km
2
of marine biodiversity
areas by 2030.
Facilitate
responsible
sustainable
shipping within
theindustry.
Think globally
to achieve One
Braemar.
Activate global
programmes for
bringing diverse
talent into the
workforce.
Think globally,
act locally to drive
benefit for our
communities.
Collect data &
report on ESG
metrics aligned to
strategy.
Environmental
Responsibilities
32
Braemar Plc Annual Report and Accounts 2024
EPSG Report
continued
Shipping continues to be one of
the most energy efficient ways to
transport freight around the world.
On average, it produces 25 grammes of CO
2
per tonne-
kilometre, compared to 600g CO
2
/tonne-km for aviation
and 50-150g CO
2
/tonne-km for road-based transportation.
Nevertheless, the international shipping industry accounts
for approximately 3% of worldwide GHG emissions and
faces significant challenges in the transition to a green
economy. However, efforts to reduce shipping’s GHG
emissions have picked up pace in the last twelve months.
The International Maritime Organisation (“IMO”) introduced
regulations targeting emissions of existing ships in
January 2023, the Carbon Intensity Indicator (“CII”) and
the Energy Efficiency Existing Ship Index (“EEXI”). The
EEXI is a one-time requirement for existing vessels to
demonstrate that they are as technically efficient as
their newbuild counterparts. The CII, on the other hand,
looks at operational efficiency, with each vessel receiving
an A-E efficiency rating based on their performance in
thepreviousyear.
The European Union is bringing in its own rules targeting
international shipping. The past year has seen preliminary
deals reached on the EU Emissions Trading Scheme
(“EU ETS”) and FuelEU Maritime.
Environmental
Responsibilities
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
33
Alongside these regulations, companies
are facing growing financial pressure
to decarbonise. This is now translating
into early adoption of alternative
fuels, production is increasing and
infrastructure is being put in place in
large EU ports. Methanol has emerged
as a fuel option, and the first ammonia
engines are also expected by the end of
2024 or early 2025.
Developing an affordable and
sustainable global supply of these fuels
remains a significant challenge. Efficiency
improvements will therefore be key to
meeting immediate emissions goals. A
range of emissions saving devices are
being utilised, with some even turning
back to wind. Optimising operations
by taking advantage of the latest data
and AI technologies are also offering
considerable savings.
While there is a long road ahead,
shipping is now taking the first solid
steps towards a green energy transition.
Our direct impact
With Braemar’s position as a broker
we seek to facilitate climate-smart
shipping, aiming to mitigate risk and
seek opportunities to aid our clients in
the green transition.
As a business, we continue to look for
ways to reduce our carbon footprint,
which is a result of energy use from our
offices, employees working from home
and business travel. We encourage
waste recycling within our offices and,
in the UK, we operate cycle to work and
electric vehicle schemes and are looking
to make improvements into the energy
efficiency of our offices. With business
growth comes an increased carbon
footprint, especially from our business
travel; we will seek ways to reduce this in
the coming years.
As in previous years, we have continued
to offset our reported footprint through
the purchase of carbon credits from the
Braemar Offset product via CHOOOSE.
The schemes that these carbon credits
invested in included wind power, solar
photovoltaic projects, conservation
initiatives and biomass/landfill gasprojects.
Streamlined Energy and Carbon
Reporting (“SECR”)
We measure and monitor our energy
and calculate our greenhouse gas
emissions based on the use of gas and
electricity in our offices, car usage for
business purposes and business travel,
as shown in the table below. The data
in this table represents the Group’s GHG
emissions and excludes associates.
Scope 1 covers direct emissions from owned or controlled sources.
Scope 2 covers indirect emissions from the generation of purchased electricity, steam,
heating and cooling consumed by the Group.
Scope 3 includes the following indirect emissions from the Group’s value chain most
material to our business: business travel, employees working from home, and transmission
and distribution of electricity. Scope 3 emissions do not currently include purchased goods
and services, waste disposal, investments or leased assets.
Our carbon footprint has been calculated using the GHG Protocol Corporate Standard
guidelines, using the UK emission conversion factors produced for 2023 by the UK
Department of Business, Energy and Industrial Strategy (“BEIS”) and Department for the
Environment, Food and Rural Affairs (“DEFRA”). The model used to calculate the Group’s
GHG emissions was developed by an independent consultant; however, the data used to
populate this model has not been independently verified.
Scope 3 emission sources
Transportation and distribution (“T&D”) of
electricity = 14.49tCO
2
e
Employees working from home = 18.75tCO
2
e
Business travel in rental cars or employee-
owned vehicles = 40.02tCO
2
e
Emissions from flights = 2,246.11tCO
2
e
Total Scope 3 = 2,319.36tCO
2
e
Scope 1, 2 and 3 emissions
Scope 1 = 11.84tCO
2
e
Scope 2 = 188.82tCO
2
e
Scope 3 = 2,319.36tCO
2
e
Total carbon footprint = 2,520.03tCO
2
e
The Group’s total emissions have
increased by 1,689tCO
2
e to 2,520tCO
2
e
(2023: 830.72tCO
2
e). This is mainly due
to increases in business travel, especially
flights taken for meetings with clients as
the business grows and travel resumes
post COVID restrictions.
In line with the SECR requirements,
we calculated, and report consistently
each year, our intensity ratio based on
our emissions per Full-Time Equivalent
(“FTE”) employee, which we consider
to be an appropriate measure for our
people-based business.
Braemar Plc Annual Report and Accounts 2024
34
EPSG Report
continued
Braemar Plc – Group energy usage and associated GHG emissions
SECR Reporting year – 1 March 2023 to 29 February 2024
Year ended 28 February 2024 Prior year
UK RoW Total UK RoW Total
Energy consumption (kWh)
Gas 0 39,610 39,610 31,760 58,610 90,370
Electricity 386,691 253,207 639,898 37 7,581 210,762 588,343
Mileage 788 184,804 185,592 643 131,003 131,646
Total energy consumption 387,479 47 7,621 865,099 409,984 400,375 810,359
GHG emissions (tCO
2
e)
Scope 1
Emissions from combustion of gas 0.00 7.13 7.13 5.80 10.70 16.50
Emissions from combustion of fuel
for the purposes of owned transport 0.19 4.52 4.71 0.16 6.31 6.47
Scope 2
Emissions from purchased electricity
(location-based) 80.07 108.75 188.82 73.02 93.77 166.79
Scope 3
Emissions from transportation and
distribution(“T&D”) of electricity 6.93 7.56 14.49 7.0 9 1.66 8.75
Emissions from employees working
from home 7.79 10.95 18.75 5.10 14.61 19.71
Emissions from business travel in rental
carsoremployee-owned vehicles 0.00 40.02 40.02 0.00 25.27 25.27
Emissions from flights 1,317.40 928.71 2,246.11 352.92 234.30 587. 22
Total gross emissions 1,412.39 1 ,107.64 2,520.03 444.09 386.63 830.72
FTE 208 204 412 138 246 384
Carbon intensity per FTE
6.79
tCO
2
e/fte
5.43
tCO
2
e/fte
6.12
tCO
2
e/fte
3.22
tCO
2
e/fte
1.57
tCO
2
e/fte
2.16
tCO
2
e/fte
Facilitating climate-smart shipping
The Group is clear that its EPSG purpose
is facilitating climate-smart shipping.
This is the primary way that we can
support our clients in navigating both the
risks and opportunities associated with
climate change, the most pressing global
issue that the industry faces.
Over the years, we have developed
several products and services to support
our client’s transition to the green
economy. These include our End of Life
and recycling advisory services to support
ship owners to use greener recycling
practices, often changing their practices
towards those which are not harmful to
the local environment and community.
Our research teams provide analysis for
our clients on the transition to the green
economy, regularly publishing the “Net
Zero Roundup” highlighting development
as the industry transitions.
Braemar Offset, our carbon footprint
calculation and offset partnership with
the CHOOOSE platform, is now in
its third year. Braemar Offset directly
connects our clients with impactful and
verified climate projects which helps
them play a proactive role improving their
sustainability and positively accelerate
climate action.
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
35
GOVERNANCE
Describe the board’s
oversight of climate-related
risks and opportunities
Principal risks and uncertainties
on pages 43 to 49
Audit & Risk Committee Report
on pages 56 to 60
Full The board has overall responsibility and oversight of climate-related risks and
opportunities. It is informed by the Audit & Risk Committee of risks and opportunities in
relation to climate change.
The Audit & Risk Committee reviews the impact of climate-change risks and
opportunities and incorporates these risks and opportunities into the Group’s risk
management framework.
The Risk Committee reports to the Audit & Risk Committee via the Group Chief
Financial Officer, who has executive responsibility for risk management. The Risk
Committee advises the Audit & Risk Committee on the Company’s risk management
framework, risk appetite and strategy and in evaluating the effectiveness of
risk mitigation strategies and internal controls. Further details on the roles and
responsibilities of these two committees can be found on page 44.
Describe management’s
role in assessing and
managing climate-related
risks and opportunities
Principal risks and uncertainties
on page 44
Full During FY24, the CFO, with the support of the Risk Committee, had overall responsibility
for assessing and managing climate-related risks and uncertainties. With the support
of external consultants and internal industry experts, the management team is kept
updated on climate-change risks and opportunities throughout the year. Going
forward, we will conduct a scenario analysis, from which management will discuss the
likely climate risks and opportunities to decide those most material to the business.
STRATEGY
Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium and
long term
Principal risks and uncertainties
on page 46
Partial The Risk Committee has considered the Group’s climate-related risks and
opportunities and has identified the following relevant timeframes:
Short term: 0–2 years.
Medium term: 3–10 years.
Long term: Beyond 10 years.
Environment and Climate Change has been identified as a principal risk, although it is
not expected to have an impact on financial performance in the short term.
The Group has commissioned an external ESG advisory firm to support the Company
to better identify climate-related risks and opportunities on the organisation’s business,
strategy and financial planning. This work was postponed during the year but remains
a priority and will be a key focus for FY25.
Further detailed risks and opportunities will be presented on completion of the scenario
analysis work in time for reporting in the FY25 report.
Task Force on Climate-related Financial
Disclosures Report
The following summary sets out how the
Group incorporates climate-related risks
and opportunities into the four pillars set
out by the TCFD: governance, strategy, risk
management, and metrics and targets.
This summary includes references to
other sections of this Annual Report
where further disclosures are provided,
and an explanation is given where
the Group’s compliance with TCFD
disclosures is partial or omitted.
This is our third year of TCFD reporting,
and we are starting to analyse the
impacts of climate change on our
business and better understand the
implications of the financial risk of
climate change. While we are not
yet fully compliant with the TCFD
recommendations we are building
towards full compliance with TCFD-
recommended disclosures in future
years. In the table below, we have stated
where we are fully, partially or not yet
compliant against each disclosure.
The Group recognises that the
international shipping industry accounts
for approximately 3% of worldwide
greenhouse gas emissions which
presents some risks and opportunities
for our business.
We seek to incorporate the Task Force
on Climate-related Financial Disclosures
(“TCFD”) recommendations into our
strategic decision making going forward.
Braemar Plc Annual Report and Accounts 2024
36
Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy and financial
planning
Non-
compliant
The commissioned external ESG advisory firm will also help quantify the impact of
climate-related risks and opportunities on the organisation’s business, strategy and
financial planning.
The Risk Committee has been tasked with ensuring that the impacts of climate-related
risks and opportunities are assessed in the Group’s business, strategy and financial
planning. We will continue to develop this area throughout the year and provide
updates in future reports.
STRATEGY continued
Describe the resilience of
the organisation’s strategy,
taking into consideration
different climate-related
scenarios, including a 2°C
or lower scenario
Non-
compliant
The Group has started to model climate-related scenarios and to assess the resilience
of the organisation’s strategy to these scenarios. It is considered that there is little or no
negative impact in the short term, and this is balanced with possible opportunities.
The Group incorporates various financial scenarios in its strategic modelling, including
freight rates, commodity prices, and foreign exchange rates. During the year, work to
commence incorporating climate change scenarios into the Group’s financial modelling
was postponed, but will be a key focus in FY25.
When this initial work is complete the Group will be able to better quantify the impacts
and assess the resilience of the Group’s strategy. Updates will be provided in future
reports.
RISK MANAGEMENT
Describe the organisation’s
processes for identifying
and assessing climate-
related risks
Partial During FY24, the Audit & Risk Committee, with support from the Risk Committee,
had responsibility for identifying, assessing and managing climate-related risks and
opportunities. The Audit & Risk Committee has responsibility for monitoring this as an
ongoing risk.
Describe the organisation’s
processes for managing
climate-related risks
Partial The Audit & Risk Committee, with support from the Risk Committee, is responsible for
identifying, monitoring and managing climate-related risks.
Describe how processes for
identifying, assessing and
managing climate-related
risks are integrated into the
organisation’s overall risk
management
Links to Principal risks and
Uncertainties Report
on pages 43 to 49
Full The processes described above are fully integrated into the Group’s overall risk
management processes.
METRICS AND TARGETS
Disclose the metrics used
by the organisation to
assess climate-related risks
and opportunities in line
with its strategy and risk
management process
Non-
compliant
Work to develop a set of metrics to demonstrate how we will assess our climate-
related risks will carry over into FY25. An update on this work will be published in future
Annual Reports. These metrics will be aligned to the Group’s specific climate-related
risks as well as the Environment pillar of the Group’s EPSG Framework.
Disclose Scope 1, Scope 2,
and, if appropriate, Scope
3 greenhouse gas (“GHG”)
emissions, and the related
risks
Partial The Group has disclosed all mandatory Scope 1 and Scope 2 GHG emissions.
The Group has also disclosed material voluntary Scope 3 emissions, including the GHG
emissions due to employees working from home.
Task Force on Climate-related Financial
Disclosures Report continued
EPSG Report
continued
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
37
METRICS AND TARGETS continued
Describe the targets used
by the organisation to
manage climate-related
risks and opportunities
and performance against
targets
Non-
compliant
The Group has committed to reaching net zero by 2050 in line with the UK’s objective
for doing so.
The Group continues to offset its carbon footprint on an annual basis through our
Braemar Offset platform in partnership with CHOOOSE.
Work to develop metrics and targets to manage climate-related risks and opportunities
and performance against targets will carry over into FY25. An update on this work will
be published in future Annual Reports.
In its EPSG framework, the Group has committed to aligning its climate-related targets
to certain references in the United Nations Sustainable Development Goals (“SDGs”).
The references that are relevant to climate-related risks and opportunities are:
SDG 8.4 Improve Resource Efficiency in Consumption and Production.
The Group is developing targets to improve the energy-efficiency of its offices.
SDG 13.3 Improve education, awareness-raising and human and institutional capacity
on climate change mitigation, adaptation, impact reduction and early warning.
The Group is developing targets to raise awareness of climate change and
mitigations in our industry among both our team and our clients.
The Braemar view on climate-
related financial risks and
opportunities
As we continue to develop our
understanding and approach to climate-
related risks and opportunities, we are
becoming more aware of the effects
as well as the opportunities that this
presents to the business.
Clearly, climate change regulation will
have some impact on the selling and
transportation of some goods that
we help our clients ship around the
world, such as coal. Over time, some
nations may ban this fossil fuel from
entering their country, and so we expect
a downturn of the amount needed
transporting over the long term.
However, conversely, we are presented
with opportunities to broker ships that
directly support the transition to green
energy as well as the alternative goods
needed for the green transition, the
increase in the renewables markets and
auxiliary services required to facilitate
that, and chartering voyages via zero
shipping routes, among others. We
currently operate an offset provision
service via Braemar offset.
The recent change to regulation with
shipping now included in the European
market Emissions Trading Scheme (“EU
ETS”) both presents a short-term risk
and offers opportunities to the market.
On balance, we feel well prepared for
both the possible risks and opportunities
for the business. Although we have
experienced a delay to this work over
the reporting year, we remain committed
to developing climate scenarios and
analysis based on the short, medium and
long term and according to Paris aligned
commitments of both 1.5 and 2 degree
scenarios. Further detail on our climate-
related financial risk will be disclosed as a
result of this ongoing work.
38
Braemar Plc Annual Report and Accounts 2024
Excel
Grow
EPSG Report
continued
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
39
We have continued to make progress this
year towards creating a globally consistent
employee experience for our people.
People are Braemar’s most important
asset and our new systems give us better
data-driven insights into how we can
improve how we support them.
Employee support and training
In 2023, we rolled out our training
platform to all employees globally, with
a focus initially on compliance training.
The new global HR system helps to
enhance the employee experience,
particularly during the onboarding of
new employees; we can now start their
Braemar knowledge and induction
programme before they arrive for their
first day in the office.
Employee engagement
During 2023, an internal Operations
Committee was established. The
Operations Committee enables us
to consult more effectively with more
employees across the world, and to
ensure that their ideas are included in
broader company decision making.
The Operations Committee enables
all heads of support functions to meet
regularly to hear ideas and suggestions
for how to improve the business and
provides an opportunity for cross function
collaboration, addressing challenges and
suggesting new initiatives.
From London to Singapore, Greece to Dubai, Germany to
Australia and beyond, we have introduced new global HR and
payroll systems and processes to create an enhanced employee
experience that is globally consistent and transparent, these
systems and processes are already helping us improve how we
hire, support and motivate our people.
People
To engage with our employees and
drive forward our EPSG agenda, we
established an EPSG Committee.
The Committee will have global
representation when it is fully constituted
and will be tasked with taking the action
needed to meet our EPSG-related
objectives and will report and make
recommendations to the board on EPSG
related matters.
Health & well-being
We continue to support employees with
their mental health and overall well-being
and we have enhanced our Employee
Assistance Programme and associated
offering, through a tailored provision which
focuses on lifestyle and well-being.
Talent development
Our Trainee Broker Scheme launched
in the UK in September 2023. Over 200
applications were received via Braemar’s
website, and five successful applicants
were chosen through group, individual
and panel interviews. The Scheme gives
the trainees the opportunity to gain
a solid foundation in the shipbroking
industry through six months of rotating
through the different desks.
The Trainee Broker Scheme is open to
anyone from any background who has
the drive and curiosity to start a career in
shipbroking.
Trainee Broker Programme
Braemar introduced its Trainee Broker
Programme in September 2023 to bring
new talent into the business. Over a
six-month period trainees are rotated
across all key shipbroking divisions,
developing technical, organisational
and communication skills. Trainees
are mentored throughout and upon
successfully completing the programme
are offered a full-time role as a shipbroker.
Following the success of the programme
in the UK, it is planned to be rolled out to
other locations.
Gender diversity
As at 29 February 2024, women
accounted for 25% of our global
workforce (2023: 23%), and we have
added one female non-executive
director to the board, which is now made
up of 3 female and 4 male directors.
During the year, we
made great progress
on the systems and
processes needed to
support and listen to
our people - who are
vital to the success
and growth of
ourbusiness.
Next, we turn our
attention to engaging
our people with
the societal and
environmental
objectives - such
as bringing more
diverse talent into the
industry and clean
oceans - which are
closely aligned to our
business and laid out
in our EPSG strategy
and commitments.
Becki Mackay,
Group Head of HR
Braemar Plc Annual Report and Accounts 2024
40
EPSG Report
continued
Society
When we adopted our EPSG Framework
in 2022, we committed by 2025 to a
number of short, medium and longer-
term goals, including:
– developing programmes to diversify
our workforce;
– strengthening our existing charity
partnerships;
– focusing on the key social issues
affecting the countries in which we
operate; and
– identifying new charitable
beneficiaries with a focus on the
environment and oceans, as well as
the needs of maritime and seafaring
communities.
We also set an objective to engage
our employees in delivering our
environmental and social goals alongside
Company-initiated activities.
Diversifying our industry
We have made progress on workforce
diversification and our objective to kick-
start the careers of the next generation
of diverse shipbrokers. Our new Trainee
Broker Scheme is open and inclusive,
with the express intention of attracting a
wide pool of talent.
We have been supporting diverse talent
development in Greece through an
apprenticeship programme for trainees
and interns, paying them a full salary
and benefits.
Strengthening charity partnerships
While we work towards implementing
a more strategic global approach to
social and environmental charitable
partnerships, our offices have continued
to support our long-term charity
partners, as well as new partnerships.
Every December we launch our ‘Advent
Calendar of Charities’, donating a total of
£26,000 to charities that hold personal
significance for our employees.
For each day in December 2023, an
employee was randomly selected to
nominate a charity to receive £1,000 -
and on Christmas eve this amount was
doubled to £2,000. Some employees
chose to divide their donation between
two of their favourite charities.
The nominated charities encompass
a broad spectrum, with a predominant
focus on health, care, and well-being for
both adults and children. Among them
are organisations such as Andy’s Man
Club, The Ehlers-Danlos Society, Stroke
Association, Alzheimer’s Society, MIND,
Cancer Research UK, Great Ormond
Street, Medecins Sans Frontieres,
Motor Neurone Disease, My Name’s
Doddie, My Shining Star, Royal Star
& Garter, Wonderful, Woking Homes,
andTommy’s.
Additionally, some employees directed
their support to charities specialising
in hospice care, including Saint Francis
Hospice, Princess Alice Hospice, and
Phyllis Tuckwell Hospice Care.
One person chose to contribute to Code
Brave, an organisation dedicated to
empowering Lebanon’s next generation
through technology education.
Below: Brokers from the London Sale & Purchase desk at the Hayfin Maritime annual golf
charity event to support The Mission to Seafarers in October 2023.
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
41
Governance
Throughout the year,
we have demonstrated
our commitment to
upholding the highest
standards of corporate
governance to ensure
that our commitment to
running a responsible
and ethical business is
upheld.
This is integral to enhancing Braemar’s
reputation and maintaining the trust
and support of its shareholders, clients,
employees and wider stakeholders. The
board appointed a female non-executive
director in May 2023, bringing the
percentage of female directors on the
board to 43%.
Further details of the Group’s compliance
with the UK Corporate Governance
Code can be found in the Corporate
Governance Report on pages 50 to 53
of this Annual Report.
Elizabeth Gooch, independent non-
executive and senior independent
director, is responsible for oversight
of our EPSG framework. Group Chief
Executive Officer Grant Foley is the EPSG
executive sponsor. The EPSG Committee
will provide regular updates to the Group
Executive Committee and the board.
Following the internal independent
investigation, the board and the Group
acted promptly to address the process
and control areas that were identified
as requiring improvement. This included
reviewing and refreshing our key
compliance policies.
The work to strengthen our control
framework remains ongoing and is
overseen by the Audit & Risk Committee.
Part of this work has seen the
Compliance team grow in number
from one to four people (with further
investment in our Compliance
function planned), this investment in
Compliance has placed Braemar in a
good position to meet all relevant legal
and regulatory obligations. We have
introduced a refreshed mandatory
training programme, with all employees
re-trained on all key compliance policies.
Additionally, the regulated business has
received more bespoke training, for
example on SMCR conduct rules.
Employees continue to be supported
by an externally provided telephone
line to report any incidents under our
Whistleblowing Policy, and by the Group’s
internal training programme. As part of
employee onboarding, new joiners must
complete our Governance Framework
training which covers all our key polices
including Anti-Bribery and Corruption,
Anti-Tax Evasion, Anti-Fraud, Anti-Money
Laundering/Know Your Customer and
Gifts & Entertainment Policy.
We are committed to protecting
human rights and ensuring there is
no slavery or human trafficking in our
business or supply chain. There is a
clear statement of our intent on our
website www.braemar.com.
Braemar Plc Annual Report and Accounts 2024
42
Non-Financial Information Statement
Braemar presents its non-financial information statement in
compliance with sections 414CA and 414CB of the Companies Act
2006. We explain here where you can find further information on
how we act responsibly in relation to our employees, wider society
and the environment.
Reporting requirement
Key policies and standards
(which include relevant due diligence requirements) Further information
Environmental matters – Health, safety and environmental Refer to the EPSG Report on pages 30 to 41
Our employees – Employee handbook
– Whistleblowing
– Health and safety
Refer to the EPSG Report on pages 30 to 41
Social matters Refer to the EPSG Report on pages 30 to 41
Human rights – Anti-slavery
– GDPR
Refer to the EPSG Report on pages 30 to 41
Anti-bribery and
corruption
– Anti-Bribery and Corruption
– Anti-Tax Evasion
– Anti-Fraud
– Anti-Money Laundering/Know Your Customer
– Entertainment, Meals and Gifts
Refer to the EPSG Report on pages 30 to 41
Our business model For more information, refer to pages 8 to 9
Principal risks –
Riskmanagement
For more information, refer to pages 43 to 49
Non-financial key
performance indicators
Refer to pages 16 to 17 for the non-financial key
performance indicators
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
43
Principal Risks and Uncertainties
for the year ended 29 February 2024
Risk management
Effective risk management forms an
integral part of how we operate. It is
essential for delivering our strategic
objectives as well as protecting our
relationships and reputation.
The Group’s risk management
framework
Risk awareness is a key element of
Braemar’s organisational culture at all
levels and is key in managing risks to our
business, helping to ensure the process
of risk identification, assessment and
response is embedded within daily
operational and functional activities
across the Group.
The board is responsible for managing
the Group’s risk, overseeing the internal
control framework, and determining the
nature and extent of the principal risks
the Group is willing to take to achieve
its long-term objectives. The Group’s
risk management and internal control
frameworks are continually monitored
and reviewed by the board and the
Audit & Risk Committee, with support
from the Risk Committee. The board is
committed to maintaining the highest
standards of conduct in all aspects
of its business, but in considering the
other matters set out in Section 172 of
the Companies Act 2006, the directors
are mindful that the approach must
be balanced with both employee
interests and the Group’s need to foster
business relationships. Group policies
and procedures have been designed to
ensure that the level of risk to which the
Group is exposed is consistent with the
Group’s risk appetite and aligned with
the Group’s long-term strategy.
Reporting to the Chair of the Audit &
Risk Committee and administratively to
the Chief Financial Officer, the Head of
Internal Audit & Risk leads the Internal
Audit & Risk managementfunction.
Risk management process
The Group’s risk management approach
or framework incorporates both
bottom-up and top-down identification,
evaluation, and management of risks.
Within our framework:
– Senior management has initial
responsibility for identifying,
monitoring, and updating business
risks; and while
– The management teams of Group IT,
HR, Legal, Compliance and Finance
assess their respective functions for
operational and functional risks not
identified by senior management.
The Group’s risk management
framework is managed via an online
system which is accessible to the senior
management team and operational and
functional management teams globally.
The system’s functionality has allowed
for enhanced monitoring and reporting
automation. The system allows for:
– Group-wide real-time updating;
– Distribution and completion of
periodic internal control self-
assessment surveys;
– Ongoing monitoring of risks and
mitigation activities at Group,
operational, and functional levels; and
– Risk management reporting at Group,
regional, and company location levels.
The Group’s risk management framework
considers both the likelihood and the
impact of identified risks materialising.
Risks are mitigated, where possible, by
the implementation of control activities,
which are evaluated as part of the risk-
based internal audit plan to determine
their effectiveness in mitigating or
reducing risk to acceptable levels.
All identified risks are aggregated and
reviewed to assess their impact on the
Group’s strategic objectives and identify
the resources required to manage them
effectively. Principal risks are aggregated
together with associated issues or areas
of uncertainty. Inherent risks can be
significant, but our control processes
and management actions reduce the
risk level.
The risk management process evaluates
the timescale over which new or
emerging risks may occur. The risk
management process also considers
the potential impact and likelihood of
risks, as well as the timescale over which
risks may occur. The outcome of this
process is then reviewed with further
consideration and assessment provided
by the Risk Committee, the Audit & Risk
Committee, and the board.
Oversight and evaluation of the
effectiveness of Braemar’s risk
management framework is led by the
Chief Financial Officer, supported by the
Risk Committee whose membership
includes the Chief Operating Officer,
Company Secretary, Head of Internal
Audit & Risk, and Head of Compliance,
and representatives of other functions
and locations of the business. The Risk
Committee monitors risks regularly,
taking into consideration the appetite,
tolerance, and potential impact for
specific risks on the Group.
Braemar Plc Annual Report and Accounts 2024
44
Principal Risks and Uncertainties continued
for the year ended 29 February 2024
Group risk governance
Risk governance includes principal, operational and emerging risks.
Executive
Committee
– Identifies strategic risks.
– Assesses level of risk
related to achieving
strategic objectives.
– Oversees execution
and implementation of
mitigations into strategic
and operating plans.
Board of Directors
– Reviews and approves risk management and internal control systems.
– Determines the nature and extent of principal risks.
– Monitors exposures to ensure their nature and extent are aligned with Braemar’s goals
and strategic objectives.
– Sets the tone for developing and embedding a risk-aware mindset into Braemar’s
organisational culture.
Operational and functional business areas
– Performs risk identification and assessment across operational and functional areas.
– Embeds risk mitigation and internal controls monitoring across functional areas and regions.
– Embeds risk awareness culture in day-to-day processes and operations.
Audit & Risk
Committee
– Supports the board in
monitoring risk exposures
against risk appetite.
– Reviews the effectiveness
of Braemar’s risk
management and internal
control systems.
Risk
Committee
– Supports the Audit &
Risk Committee in
evaluating the effectiveness
of risk mitigation
strategies and internal
controls implemented
by management.
Top-down
Oversight, identification,
assessment, and mitigation
of risk at Group level.
Bottom-up
Identification, assessment
and mitigation of risk across
Braemar’s operational and
functional areas.
Principal risks
The principal risks which may impact the
Group’s ability to execute its strategic
objectives have changed since 2023.
In FY24, one new emerging risk has
been added. The risks that follow, while
not exhaustive, are those principal
risks which we believe could have the
greatest impact on our business and
have been discussed at meetings of
the board, the Risk Committee and the
Audit & Risk Committee. The board
reviews these risks in the knowledge
that currently unknown, non-existent
or immaterial risks could turn out to be
significant in the future and confirms
that a robust assessment has been
performed. The Audit & Risk Committee
review and approve the principal risks
and any related mitigation plans.
Competition risk and market
consolidation (New principal risk)
Competition in the shipping industry
is becoming increasingly intense, and
there is a growing trend towards market
consolidation, as companies seek to
gain scale and reduce costs.
Other changes
One principal risk disclosed in the 2023
Annual Report has had its title changed
from ‘Loss of key personnel and weak
organisation culture’ to ‘People and
Culture’. While no change in the overall
risk level has been observed, the new
title better captures the nature of the
related risk.
Risk mitigation
As part of our risk management process,
the Group takes various measures to
mitigate risk, throughout the year these
measures included:
– Ongoing periodic review and updating
of policies and procedures, including
AML and KYC, to enhance/strengthen
the Group’s governance framework,
with ongoing monitoring of employee
training completion rates.
– A signature authorisation and
delegation of authority policy,
complemented by independent
assurance activities.
– Usage of common finance, HR and
operations systems across the Group
supported by our IT team.
– Succession planning and strategic
recruitment supported by the Group
HR team.
– Establishment of board-approved
Group budgets with ongoing
performance monitoring against
budgets/reforecasts and investigation
of significant variances.
– Regular reporting of treasury
management activity to the board by
the Group Chief Financial Officer.
– Ongoing monitoring of contractual
risk by the Group legal team.
– Operation of the Group’s
whistleblowing procedure.
– Maintenance of appropriate
insurancecover.
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
45
Principal risks
The directors have carried out an assessment of the principal and emerging risks facing the Group. The most significant risks to
which the board considers the Group is exposed, based on the evaluation process described in the Group’s risk management
framework, are set out below.
Risk Summary of impact Mitigating control and management actions
Net risk
change
Competition risk and market consolidation
Competition in the shipping
industry is becoming
increasingly intense, and there
is a growing trend towards
market consolidation, and
hiring established brokers as
companies seek to gain scale
and reduce costs.
Loss of established brokers could
impact revenues. Increasing
consolidation could impact the
Group’s M&A strategy for growth.
– Regular horizon-scanning exercises are conducted by
the leadership team which aim to identify areas of the
business that could be targeted by competitors.
– Leadership team monitors transactions in the industry
looking for trends.
Cybercrime/data Security
Cybercrime could result in loss
of business assets or disruption
to the Group’s IT systems and
its business. Lack of appropriate
data security could result in loss
of data.
Loss of service and associated
loss of revenue. Reputational
damage. Potential for material
losses due to fraud or phishing.
– To address the persistent threat of cyber-attacks, and
to enhance security measures already in place, Braemar
has embarked on a global Cyber Security programme.
This programme includes the implementation of the NIST
Cyber Security Framework and ISO 27001 as Braemar’s
controls catalogue. Our Security Operations Centre is fully
operational with 24/7 monitoring and coverage.
– Our IT processes prioritise cyber security through regular
penetration testing, anti-virus and firewall deployment,
use of a trusted third-party software-defined wide area
networking (“SD-WAN”) solution, regular vulnerability scans,
frequent complex password changes, email authentication
protocols, and strict access control procedures.
– The security operations centre (“SOC”) supports the
wider cybersecurity control environment by providing
continuous monitoring and analysis of networks, systems,
and applications to detect potential threats, as well as
enabling rapid incident response through leveraging threat
intelligence, skilled security analysts, and established
processes for investigation, containment, and eradication
of identified attacks or breaches.
Geopolitical and macroeconomic
Braemar’s businesses is reliant
on global trade flows and,
as such, may be negatively
impacted by geopolitical and/
or macroeconomic issues, such
as changes in crude oil price,
restrictions in global trade due
to pandemics sanctions, and
changes in supply and demand.
A downturn in the world economy
could affect transaction volumes,
resulting in reduced revenue.
Changes in shipping rates and/or
changes in the demand or pricing
of commodities could affect
supply activity.
Note:
The continued conflict between
Russia and Ukraine and related
global sanctions has increased
the potential impact of risks
associated with both geopolitical
and/or macroeconomic issues and
compliance with relevant laws and
regulations.
– Regular horizon-scanning exercises are conducted by the
leadership team which aim to identify emerging trends
and disruptive forces in this area while monitoring the
competitive landscape.
– Diversification on a sector and geographic basis reduces
dependency on individual business areas.
– Ongoing monitoring to ensure the Group is appropriately
resourced across its activities and geographies.
– Ongoing management of costs based on current and
reasonably foreseeable market conditions.
– Enhanced KYC procedures and ongoing monitoring of
compliance with governance policies, sanctions, and other
legal/regulatory requirements across the Group to help
ensure laws and regulations are not breached.
– Braemar’s diverse service offering, led by experts in their
fields, means the Group is in the best position to find new
opportunities in volatile market conditions and able to take
advantage of market turnarounds.
Key:
Increased Decreased No change New
Braemar Plc Annual Report and Accounts 2024
46
Principal Risks and Uncertainties continued
for the year ended 29 February 2024
Risk Summary of impact Mitigating control and management actions
Net risk
change
Compliance with laws and regulations
Braemar generates revenues
from a global business that
exposes the Group to risks
associated with legal and
regulatory requirements.
Legal and regulatory breaches
could result in fines, sanctions
being imposed on our business,
and the loss of Braemar’s ability to
continue operating.
Failure to meet all reporting
obligations could lead to
reputational damage which could
then lead to loss of revenue
andstaff.
– Group-wide training programme to help ensure employee
awareness of, and compliance with, all relevant legal and
regulatory obligations:
– Braemar Corporate Governance Framework;
– Braemar risk management methodology;
– Compliance with our policies, including our AML/
KYC policies’ (enhanced) customer due diligence
requirements; and
– Compliance with relevant laws and regulations, including
anti-bribery and corruption regulations.
– Enhanced KYC procedures and ongoing monitoring
of compliance with governance policies and legal/
regulatory requirements across the Group to help ensure
requirements are not breached.
– Ongoing monitoring to ensure insurance cover is
maintained at adequate levels.
Currency fluctuations
The Group is exposed to foreign
exchange risk because a large
proportion of its revenue is
generated in US dollars while
its cost base is in multiple
currencies.
A change in exchange rates could
result in a financial gain or loss.
– The board sets the Treasury Policy which details the
level of exposure the board is comfortable with and the
Group hedges to the level stipulated in the Treasury Policy.
Forward currency (US$) contracts are entered into to
mitigate the risk of adverse currency movements.
Disruptive technology
Shipbroking is still largely a
business that is transacted
via personal relationships
dependent on quality service.
Hence the risk of technological
change, disintermediation and
increased customer demands
for enhanced technological
offerings could render aspects
of our current services obsolete,
potentially resulting in loss of
customers.
Relationships could be devalued
and replaced by disruptive
technology platforms, resulting
in increased competition,
consequent price reductions, and
loss of revenue.
– Investment in technology through partnering with best-
in-class providers, such as Zuma Labs, has effectively
differentiated Braemar.
– Ongoing modernisation of our infrastructure to allow for
focus on innovation and strategic direction.
– Regular horizon-scanning exercises are conducted by the
leadership team which aim to identify emerging trends
and disruptive forces in this area while monitoring the
competitive landscape.
Environment and climate change
Seaborne transportation
is estimated to create
approximately 3% of the world’s
carbon emissions and there
will be increased pressure to
reduce that in the future. Failure
to monitor and address the risks
associated with that reduction
process could result in loss of
revenue for Braemar and its
customers and counterparties
The Group’s P&L and liquidity
could be negatively impacted if
customers are lost as a result of
our not keeping pace with our
peers and industry best practice.
Non-compliance with regulations
or disclosure requirements could
result in fines or penalties.
Failure to appropriately monitor
and mitigate these risks could
lead to Braemar suffering serious
reputational damage.
Note:
Management does not expect
climate-related risks to have a
material impact on the Group’s
short-term financial performance.
– Investment in the offshore renewables market and
technology to allow the Group and its clients to offset
carbon emissions.
– Ongoing development and EPSG strategy which allows
the Group to monitor and report on environmental and
climate-related risks.
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
47
Risk Summary of impact Mitigating control and management actions
Net risk
change
Integration risk
Braemar’s shipbroking-focused
growth strategy makes use of
strategic hires and acquisitions
to increase the size of the
business.
Integrating and aligning any
new acquisition with the Group
poses various challenges from
an operational and financial
perspective.
Inefficiencies and/or reduced
expected synergies realised after
integrating new acquisitions into
the Group and aligning them with
the respective Group strategies.
– Performance of new business is monitored through regular
dialogue with relevant business leaders.
– Compliance and legal mechanisms in place to ensure the
purchase meets any relevant regulatory requirements and
the target company aligns appropriately with the relevant
Group values.
– Prioritisation of identified growth opportunities to ensure
resources are appropriately allocated to opportunities with
the best potential return on investment.
People and culture
Braemar is a people-based
business and people are vital to
its success.
Inadequate policies and reward
structures could incentivise
negative behaviours, create
internal conflict, lead to
reputational damage, and
contribute to failure in attracting
and/or retaining skilled
personnel.
Failure to adapt to, or align with,
market expectations, including
the offering of flexible or hybrid
working arrangements, could
result in the inability to attract
and retain skilled personnel.
Lack of appropriate
consideration of environmental
and wider social issues could
also contribute to the inability
to attract and retain skilled
personnel.
Employee relations claims/
litigation/tribunals attributed to
negative behaviours or actions
increases the potential for
reputational damage because
of negative publicity in the public
domain.
Loss of key staff could result in
reduced revenue if former staff
attempt to take contacts and
business with them.
Strategic growth objectives may
not be achieved if Braemar fails to
attract and retain skilled personnel.
– Ongoing review of policies, including Conflict of Interest,
Code of Conduct, and the Employee Handbook, to ensure
behavioural expectations and employment practices for
managers and employees are clearly defined.
– Organisational structure changes included the creation
of associate director roles to identify key employees and
more clearly show progression opportunities.
– Ongoing development of a culture of engagement and
professional development, including implementation of
performance management objectives, clearly defined
pathways for career progression, and succession planning
at senior management levels.
– Annual review of compensation with external
benchmarking helps to ensure remuneration packages
continue to be appropriate and competitive.
– Ongoing consideration of roles potentially suitable for
hybrid and flexible working arrangements.
Sanctions and trade restrictions
Braemar operates in a global
landscape of international and
financial sanctions with a variety
of associated compliance
requirements.
Conducting business with
sanctioned entities, through
sanctioned regions and facilitating
transport of sanctioned goods
will lead to non-compliance with
sanctioned regimes resulting
in financial penalties/fines and
reputational damage.
Note:
Increased scrutiny from regulatory
bodies and rising geopolitical
and macroeconomic issues,
including the continued Russia/
Ukraine conflict, has increased
the potential impact of risks
associated with breaches of
sanctions and trade restriction
requirements.
– KYC procedures performed by the Group Compliance
teams with support from the Legal team.
– Through strategic and targeted recruitment, increasing
our in-house KYC and sanctions-monitoring capabilities
enhances our ability to navigate the intricate landscape of
sanctions regulations and mitigate associated risks within
our business operations.
– Technology solutions used to optimise the efficiency
ofsanction screening performed.
– External assurance providers performing internal audit
reviews over the sanctions process and validating the
implementation of recommendations previously raised
tomanagement.
– External sanctions horizon scanning support provided
byalegal advisory panel.
– Targeted training programme aimed at management
and senior desk heads to further raise awareness
of, and compliance with, all relevant legal and
regulatoryobligations.
Key:
Increased Decreased No change New
Braemar Plc Annual Report and Accounts 2024
48
Internal audit
The Group’s internal audit function is
monitored and reviewed by the Audit
& Risk Committee, to ensure that the
Group’s risk management and internal
control processes are working effectively.
A detailed description of the Group’s
internal audit function can be found on
page 59 of this Annual Report.
Going Concern
The Group generated net cash from
operating activities of £5.2 million in
the year, lower than the £22.1 million in
the prior year due to lower statutory
profits, working capital movements
and lower receipts from the disposal of
Cory Brothers. However, the business
continued to maintain a positive net
cash position at the end of the year of
£1 million (FY23: £6.9 million). The Group
has started the current financial year
in line with board expectations and the
directors believe that it is well positioned
to manage its risks going forward.
A more detailed analysis of the risks
facing the business is outlined in Note 1
(see page 96). The analysis concludes
that there is no material uncertainty
relating to going concern, based on
cash flow forecast for a 15-month period
from the signing of these accounts
to 31 August 2025. The directors have
a reasonable expectation that the
Company and Group have adequate
resources to continue to trade for
twelve months from the date of the
approval of these Financial Statements
and for this reason they continue to
adopt the going concern basis in
preparing the Financial Statements.
Viability statement
In accordance with the UK Corporate
Governance Code, the directors have
assessed the prospects of the Group
over a period of four years, which they
believe is an appropriate period based
on the Group’s current financial position,
banking facilities, budgets and forecasts,
strategy, principal risks, and exposure to
potentially volatile market forces.
In recent years, during the COVID
pandemic and delayed publication of
the FY23 annual report and accounts,
the Group’s bankers, HSBC, have been
highly supportive. The Group met all of
its financial covenant tests during the
year and is confident that it will continue
to do so. The Group has a requirement
to deliver audited financial statements to
HSBC within 6 months of the year end,
due to the delay in completing the FY23
audited financial statements the Group
obtained waivers for this in advance so
there was no breach of this requirement.
The facilities with HSBC expire in the
first instance in November 2025 but
that may be extended with lender
approval by a further two years giving
a maximum duration until November
2027. More detail can be found in Note 1
to the financial statements on page 96
of this report. The viability assessment
has been carried out over a four-year
period from the balance sheet date to
29 February 2028, by which time new
banking facilities will need to have been
concluded. It therefore assumes that
similar banking facilities will be made
available to the Group for the whole of
this time. The directors’ assessment
considers those current facility terms
and includes a review of the financial
impact of significant adverse scenarios.
In generating those scenarios,
consideration was also given to the
following risks to the business that have
been identified in this Report on pages
43 to 49 as new or increasing:
Competition risk and market
consolidation
Competition in the shipping industry
is becoming increasingly intense, and
there is a growing trend towards market
consolidation, as companies seek
to gain scale and reduce costs. Loss
of established brokers could impact
revenues. Increasing consolidation
could impact the Group’s M&A
strategy for growth. Regular horizon-
scanning exercises are conducted
by the management team which aim
to identify areas of the business that
could be targeted by competitors.
The management team monitors
transactions in the industry looking
for trends.
Cybercrime and data security
Cybercrime could result in loss of
business assets or disruption to the
Group’s IT systems and its business.
Lack of appropriate data security could
result in loss of data. Loss of service and
associated loss of revenue. Reputational
damage. Potential for material losses
due to fraud or phishing. To address the
persistent threat of cyber-attacks, and
to enhance security measures already
in place, Braemar has embarked on a
global Cyber Security programme. This
programme includes the implementation
of the NIST Cyber Security Framework
and ISO 27001 as Braemar’s controls
catalogue. Our Security Operations
Centre is fully operational with 24/7
monitoring and coverage.
Geopolitical and macroeconomic
The conflict in the Ukraine war raised
the risk level due to geopolitical and
macroeconomic risk with a resultant
global downturn or recession likely to
have a negative impact on the business.
Heightened tensions in other parts of
the world such as Taiwan could also
lead to further disruption, however the
experience to date is that the shipping
market volatility has if anything increased
revenue generation rather than reduced it.
Revenue was chosen as the main
variable in generating the adverse
scenarios as there are no costs of sale
within the business and the remaining
costs are largely fixed or made up of
bonus pools which will vary in line with
the levels of revenue. Set against those
falls in revenue is the likely effectiveness
of potential mitigations that are
reasonably believed to be available to
the Group over this period.
Principal Risks and Uncertainties continued
for the year ended 29 February 2024
Strategic Report Governance Financial Statements
Braemar Plc Annual Report and Accounts 2024
49
In considering these potential
mitigations, the board was mindful
of its duties under Section 172 of the
Companies Act 2006 and considered
the potentially competing interests of
different stakeholder groups and the
potential long-term consequences of
the actions, including the use of funds
for employee remuneration (and the role
this plays in the retention of staff), paying
dividends, making investments and
repaying debt.
The assessment involves the production
of cash flow forecasts designed to
assess the ability of the Group to
operate both within the banking facility
covenants and liquidity headroom. The
main downside sensitivities used were
annual revenue reductions of 7.5% and
15% from March 2024 to May 2025 and
stabilised thereafter. Under the 7.5%
cases the board concluded that with
only very minor cost-saving or cash
management mitigations available to
it, the Group could continue to operate
under the current banking facilities
over the period. Under the 15% case
certain additional cost saving and cash
mitigation actions were required to allow
the Group to continue to operate within
the current banking facilities, all of which
were within the board’s control.
The assessment also incorporated a
‘reverse stress test’ which was designed
to identify scenarios under which the
Group’s banking facilities would be
inadequate to continue as a going
concern despite using all the mitigating
options available. The result of this test
shows that all available mitigations would
be exhausted, and facilities breached
if there was approximately a 38%
decrease in forecast revenue from March
2024 through to May 2025.
The directors have concluded that whilst
future outcomes cannot be guaranteed
or predicted with certainty the revenue
and operating margin scenarios that
would lead to such a failure are highly
unlikely. This is especially so in the light
of current trading where revenues are
running ahead of previous forecasts.
They also noted that the facility
headroom in terms of liquidity remained
adequate even under the reverse
stress test conditions and that it was
the leverage covenant which would be
breached if revenue fell by more than
38% and then only during 2025.
There is no evidence indicating that
revenues will fall to levels indicated in this
test and that the likelihood is therefore
remote and that there is therefore no
material uncertainty in this regard, nor
any impact on the basis of preparation
of the Financial Statements. There is also
a reasonable expectation that the Group
will be able to continue in operation and
meet its liabilities as they fall due over the
next four financial years.
This Strategic Report was approved by
the board of directors on 22 May 2024.
Signed on behalf of the board of
directors by:
Grant Foley
Group Chief Financial Officer
22 May 2024
Corporate
Governance
50
Braemar Plc Annual Report and Accounts 2024
Letter from
our Chairman
UK Corporate Governance Code
Compliance statement
The UK Corporate Governance Code
2018 (the “Code”) was applied to the
financial year ended 29 February 2024.
A copy of the Code is available at
www.frc.org.uk. The Corporate
Governance Report seeks to support
shareholders and investors to evaluate
how the Company has applied the
principles of the Code and complied
with the provisions of the Code during
FY24. The table below signposts the
key sections of the Annual Report.
Throughout the financial year ended
29 February 2024, the Company applied
the principles and fully complied with all
the provisions of the Code, except for
provision 11 and we have provided a full
explanation in the board composition
and changes section below; the board is
now fully compliant with provision 11.
The board has noted that the Financial
Reporting Council published a revised
version of the Code on 22 January 2024.
These updated guidelines will become
effective for financial years commencing
on or after 1 January 2025. The Company
will report against the updated version of
the Code in due course.
Principles of the Code and how we comply Page references
1. Board leadership and Company purpose
Chair’s introduction 4 to 6
Our board 54 to 55
Purpose, values and strategy 2 and 9 to 11
Culture 53
Board stakeholder engagement and decisionmaking 28 to 29 and 53
Key performance indicators 17
Risk management 43 to 49
2. Division of responsibilities
Our board and governance structure 50 to 55
Independence and time commitments 52
Committee reports 56 to 78
Board and Committee meeting attendance 52, 56, 61 and 63
3. Composition, succession and evaluation
Nomination Committee report 61
4. Audit, risk and internal control
Audit & Risk Committee report 56 to 60
Directors’ responsibilities statement 80 to 81
Risk management 43 to 49 and 56
Principal risks and emerging risks 43 to 49 and 56
Going concern 27, 48 and 96
Viability statement 48
5. Remuneration
Directors’ remuneration report 62 to 78
Board Composition Board Gender Board Ethnic Diversity
(White British)
Chair 1
Executives 3
Non-executives 3
Male 57%
Female 43%
Male 4
Female 3
Current Board composition, gender and diversity of the Board members are below:
All data as at 29 February 2024.
Corporate
Governance
Financial Statements
Braemar Plc Annual Report and Accounts 2024
51
Strategic Report Governance
Nigel Payne
Chairman
Dear shareholder
On behalf of the board of directors,
Iam delighted to present the Corporate
Governance Report which details the
Company’s governance arrangements, the
operation of the board and its committees
and how the board discharged its
responsibilities during the year.
Braemar maintains a robust governance
framework, designed to support the
Company’s long-term strategy and be
in alignment with the Company’s values
and culture. The board remains highly
engaged in fulfilling its role of leading the
Company and overseeing the governance
arrangements across the Group and
continues to be committed to maintaining
a high standard of corporate governance.
Governance is a key pillar of our
Environment, People, Social and
Governance (“EPSG”) framework and a
high standard of corporate governance
is essential for the Group to succeed in
delivering its strategy and is integral to
enhancing its reputation and maintaining
the trust of its shareholders, clients,
employees and other stakeholders.
More information on our EPSG framework
can be found on pages 30 to 41 of this
Annual Report.
This Corporate Governance Report, which
comprises the compliance statement
on page 50, this letter, the Audit & Risk
Committee Report on pages 56 to 60, the
Nomination Committee Report on page 61,
together with the Directors’ Remuneration
Report on pages 62 to 78, describes how
the board and its Committees operate and
how the Company has applied the Code
during the year ended 29 February 2024.
Below I highlight some of the governance
activities that took place during FY24:
Board oversight of strategy and
sustainable growth
The board continues to oversee the
implementation of the Group’s strategy
and, following the conclusion of the internal
investigation, the board has recently been
focused on refreshing the strategy and
ensuring that the strategy sets up Braemar
for long-term sustainable growth.
Board composition and changes
The board consists of the non-executive
Chairman, the Group Chief Executive
Officer, the Group Chief Operating Officer,
the Group Chief Financial Officer and three
independent non-executive directors.
The Chairman leads the board and is
responsible for its overall effectiveness in
directing the Company, taking into account
the interests of the Company’s various
stakeholders. The Group Chief Executive
Officer leads the executive management
in the development of strategy and
the management of all aspects of the
performance and operations of the
Company and its subsidiaries. We have
a strong board which brings diverse
experience and personal skillsets; please
refer to the skills section in the director
biographies for more detail on each
director’s skills and experience. An internal
board performance review, led by the
Company Secretary and Chairman,
was undertaken early in 2024 which
concluded that the board continues to
operate effectively with each director
contributing positively to the board’s overall
effectiveness. More detail on the process
and outcome of the board performance
review can be found in the Nomination
Committee report on page 61.
The board was pleased to welcome
Cat Valentine as a non-executive director
with effect from 16 May 2023. Cat is a
communications professional with over
25 years’ experience, advising quoted
and privately owned companies on
investor and corporate communications.
She has extensive knowledge of the
small-cap growth companies’ market
and considerable M&A transactional
experience, having advised a broad range
of clients on both AIM and the Main
Market. Cat’s extensive experience has
added considerable value to the board.
On Cat’s appointment to the board, she
was also appointed to the Remuneration
Committee and Audit & Risk Committee.
Provision 11 of the Code states that at
least half of the board, excluding the
chair, should be independent non-
executive directors. As the board had
little prior notice of Stephen Kunzer’s
departure to take up a CEO position
at Lila Global in Dubai, for a short time
between Stephen’s departure in January
2023 and Cat’s appointment, while the
recruitment process was underway, the
board was not compliant with provision 11
though this was swiftly rectified following
Cat’s appointment. Further detail on the
appointment process can be found in
the Nomination Committee Report.
Braemar Plc Annual Report and Accounts 2024
52
Letter from
our Chairman continued
Further to the announcement on 20June
2023, Grant Foley joined the board
as Group Chief Financial Officer with
effect from 1 August 2023. Nicholas
Stone stepped down from the board
on31July2023.
With respect to diversity, 43% of the
directors are women and Elizabeth
Gooch is the senior independent
director. The board does not have
a director from an ethnic minority
background (as categorised by the
Office for National Statistics).
The non-executive directors, none of
whom have ever fulfilled an executive
role within the Company, are appointed
for an initial three-year term subject to
annual re-election at the Annual General
Meeting in accordance with the Code.
Prior to making director appointments,
the board (supported by the Nomination
Committee) considers other significant
director appointments to assess whether
the candidate will have sufficient time to
undertake their role effectively.
The board has considered the other
commitments of the non-executive
directors and the board continues to
believe that all non-executive directors
have sufficient time to continue
undertaking their roles effectively.
The non-executive directors are
responsible for constructively challenging
and scrutinising the strategies and
performance of the executive directors
using their independence and the
perspectives gained from their extensive
experience, as well as having broader
oversight of the Group through the work
of the board and its Committees.
Biographies of current board members,
together with information on their
skills, experience and their external
appointments, are included in this
Corporate Governance Report. All
directors have access to the Company
Secretary for advice on all governance
matters to help ensure that the board is
able to discharge its duties and function
effectively and efficiently. The Company
Secretary ensures that the board
receives the financial and operational
information they require to enable them
to appropriately discharge their duties
and responsibilities and circulates
board papers electronically in advance
of meetings. Directors may also seek
independent advice at the Company’s
expense where needed.
The board met 18 times during the year
(FY23: 15) and the attendance by each of
the directors is set out below.
Attended
Non-executive directors
Elizabeth Gooch 16/18
Joanne Lake 18/18
Nigel Payne 17/18
1
Cat Valentine 13/13
Executive directors
Grant Foley 9/9
James Gundy 18/18
Nicholas Stone 7/9
Tris Simmonds 17/18
1 In Nigel’s absence, the meeting was
chaired by the senior independent director,
ElizabethGooch.
Board Committees
The board has three standing
Committees: Audit & Risk, Nomination
and Remuneration. Each of the
board Committees comprises solely
independent non-executive directors.
The composition and responsibilities
of the board Committees are set out
in each of the Committee reports, on
pages 56 to 78 of this Annual Report.
The Remuneration Committee Report
on pages 62 to 78 of this Annual Report
is incorporated into this Corporate
Governance Report by reference. The
terms of reference for each of the
Committees can be found in the Investors
section of the Company’s website.
The Group also has an Executive
Committee to support the Group
Chief Executive Officer with the day-
to-day management of the Group
and the development and execution
of the Group’s strategy. The Executive
Committee comprises the three
executive directors.
The Group also has a Risk Committee.
The Risk Committee reports to the
Audit & Risk Committee on matters
including: the risk management activities,
risk appetite, emerging risks and other
changes to the risk matrix, the work
of the internal audit function, and the
day-to-day monitoring of the Group’s
risk management framework. The Risk
Committee is chaired by the Group Chief
Financial Officer and comprises the
Group Chief Operating Officer, Company
Secretary, Group Financial Controller,
Group Finance director, Group Head
of HR, Managing director (Singapore),
Group director of Digital Transformation
& IT, Head of Legal and the Group Head
of Compliance.
Financial Statements
Braemar Plc Annual Report and Accounts 2024
53
Strategic Report Governance
The Chair of the Audit & Risk Committee
has a standing invitation to attend
meetings of the Risk Committee and
other colleagues are invited from time to
time to provide additional input on the
Group’s operations and potential risk
exposure where considered appropriate.
Focus on risk management,
compliance and effective controls
The directors have a duty to the
Company’s shareholders to ensure that
the information presented to them is fair,
balanced, understandable, and provides
shareholders with the necessary
information to assess the Company’s
position, performance, business model
and strategy. Further details of the
directors’ responsibilities for preparing
the Company’s Financial Statements
are set out in the statement of directors’
responsibilities on pages 80 to 81 of this
Annual Report.
In fulfilling its responsibilities, the
board has established procedures for
identifying and evaluating any risks
associated with its strategic objectives
(including both emerging and principal
risks) and considering how those risks
can be managed effectively. The Audit
& Risk Committee is responsible for
the independent review and challenge
of the adequacy and effectiveness
of the Company’s approach to risk
management and reports its findings to
the board. The Audit & Risk Committee
is supported by the Risk Committee
and the internal audit function. More
information on the work of the Audit &
Risk Committee and the internal audit
function can be found in the Audit & Risk
Committee Report on pages 56 to 60 of
this Annual Report, and more information
on the Company’s risk management
processes, including a summary of the
principal risks facing the Group and the
procedures in place to identify emerging
risks, is set out on pages 43 to 49 of this
Annual Report.
Promoting a healthy culture
andvalues
The Company’s EPSG framework
recognises the three pillars of
environmental, social, and governance
that have become the widespread
definition of ESG, with the addition of a
fourth pillar to recognise the people that
are the foundation of our business and
are integral to the communities we live
and work in. As part of this framework,
Braemar remains committed to providing
its services to the highest standards
and operating ethically, lawfully and with
professional integrity at all times. The
framework enables the Company to
foster a culture and operating practices
that incorporate our values.
We believe that this will support the
Group with its strategy to grow the
Braemar brand in an increasing number
of global markets. More information on
our culture and values, what action has
been taken during the year to ensure
that policies, practices and behaviour
across the Group are aligned with
them, how we engage with, invest in
and reward our workforce, and our
commitment to diversity and inclusion
can all be found in the EPSG Report on
pages 30 to 41 of this Annual Report.
Shareholder relations
The board recognises the importance
of maintaining good communication
with key stakeholders of the Company’s
business and taking the interests of
those stakeholders into consideration in
its decision making. Key stakeholders of
the Company include its shareholders,
with whom the board seeks to engage
regularly in order to fulfil its duties under
Section 172 of the Companies Act
2006. The Company follows an active
investor relations programme carried
out mostly through regular meetings of
the Group Chief Executive Officer and
the Group Chief Financial Officer with
existing and potential investors following
the announcements of the interim and
preliminary full-year results of the Group.
The Company has also organised
various opportunities and forums
throughout the year to enable existing
and prospective investors to hear more
from the executive directors on the
business and its strategy. From time
to time, the non-executive directors
and the non-executive Chairman
will also consult with the Company’s
major shareholders. Feedback from
the Company’s shareholders is also
received through the Group’s corporate
broker and corporate affairs team. In
accordance with legal and regulatory
requirements, the Company ensures
that shareholders are kept updated
on material information, especially that
of a potentially price sensitive nature,
as soon as possible. This is done via
corporate announcements which are
made through announcements to the
market and made available on the
Company’swebsite.
The Company encourages participation
at its AGM where each resolution is
separately put to the meeting for a vote.
The Company notes that at the 2023
AGM, all resolutions proposed were
passed with the requisite majorities
of votes. The Directors’ Remuneration
Report and Remuneration Policy received
more than 20% of the votes against,
detail on the action taken to understand
the reasons behind the result are set out
in the Directors’ Remuneration Report.
The resolution on auditor remuneration
also received more than 20% of votes
against the board’s recommendation.
Due to the timing between the
reconvened 2023 AGM (which was
held on 18 December 2023) and the
preparation of this Report, the board
is yet to engage with shareholders to
understand the reasons for their votes
against this specific resolution and will
engage ahead of the 2024 AGM. The
board continues to encourage open
and constructive dialogue directly with
its shareholders and remains willing to
engage with any shareholder on any
relevant topics.
Internal independent investigation
As announced on 26 June 2023,
the board commenced an internal
independent investigation into an
historical transaction dating back to
2013. The investigation was overseen
by an Investigation Committee
chaired by myself and comprised the
independent non-executive directors.
The investigation was conducted by FRP
Advisory Trading Limited, an independent
specialist forensic accounting firm, and
independent external counsel. Although
the investigation was complex, it was
comprehensive and ultimately focused
on a review of several transactions
between 2006 and 2013.
The investigation was completed in
October 2023. The board and the Group
acted promptly to address the process
and control areas that were identified as
requiring improvement, including taking
key remedial actions and the necessary
steps to strengthen Braemar’s internal
controls. The board is committed to
maintaining a high standard of corporate
governance and is ensuring that the
remedial actions are tracked through to
completion.
Nigel Payne
Chairman
22 May 2024
54
Braemar Plc Annual Report and Accounts 2024
Board of Directors
The board consists of the non-executive Chairman,
the Group Chief Executive Officer, the Group Chief
Operating Officer, the Group Chief Financial Officer
and three independent non-executive directors.
James Gundy
Group Chief
Executive Officer
Grant Foley
Group Chief
Financial Officer
Tris Simmonds
Group Chief
Operating Officer
Nigel Payne
Chairman of the board
Elizabeth Gooch MBE
Non-executive director
&SID (from 1 April 2022)
Joanne Lake
Non-executive director
Cat Valentine
Non-executive director
Appointment date 1 January 2021 1 August 2023 1 August 2021 1 May 2021 1 August 2021 1 March 2022 16 May 2023
Background and
relevant experience
James has over 35 years’
shipbroking experience
specialising in Tankers,
Long Term Time Charter
and Sale and Purchase/
Newbuilding projects. He
joined the Company in 2014
as Chief Executive Officer
of Shipbroking following
the merger of Braemar Plc
and ACM Shipping Group
Plc, where James was the
Chief Executive Officer
of ACM Shipping. James
was an integral part of the
successful integration of the
two businesses which led to
his appointment as Group
Chief Executive Officer in
January2021.
Grant has over 25 years’
experience in leading public
and private financial services
and technology businesses.
He joined the Company from
ClearScore. As Chief Financial
Officer at ClearScore, he drove
significant improvements
across the finance function,
implementing new systems,
processes and reporting as
the business scaled. Grant
also has additional transaction
experience, and his other roles
have included CMC Markets
Plc where, as Group Chief
Financial Officer and Chief
Operating Officer, he was
instrumental in the company’s
successful IPO.
Tris has over 30 years’
experience in the commodities
industry, including 14 years
at GFI Group where he
became Head of European
Commodities. Tris founded
Atlantic Brokers in 2013 which
was sold to Braemar Plc in
2018. Since the acquisition
in 2018, Tris held the position
of Managing director
of Braemar’s derivative
brokerage business and he
was appointed as Group
Chief Operating Officer in
August2021.
Nigel joined the Company as
non-executive Chairman in May
2021. Nigel has a proven record
of enhancing shareholder value
with over 30 years’ experience
on international public and
private boards as both an
executive and non-executive
director. Nigel is a qualified
chartered accountant.
Elizabeth has over 18 years’
experience in governance,
compliance and financial
reporting of publicly listed
companies, having founded
and run EG Solutions plc.
Elizabeth works with founders
of UK tech startups and
scaleups to help them grow
and scale their businesses.
She is an angel investor, non-
executive director and mentor
to technology companies
in a wide range of sectors,
including secure messaging,
cyber security, artificial
intelligence, robotic process
automation and e-commerce.
Joanne has over 35 years’
experience in financial and
professional services – both in
investment banking, with firms
including Panmure Gordon,
Evolution Securities and
Williams de Broe, and in audit
and business advisory services
with Price Waterhouse.
Joanne is a qualified chartered
accountant and fellow of
the Chartered Institute for
Securities & Investment.
Cat was appointed to
the board in May 2023.
She is a communications
professional with over 25
years’ experience, advising
small-cap growth companies
on investor and corporate
communications. She joined
the strategic communications
advisory business, Belvedere
Communications, in 2017,
where she is director and
co-owner.
External
appointments
None. None. None. Non-executive chairman of
Gateley Holdings Plc and
Green Man Gaming Ltd.
Non-executive director of Sun
International Ltd, GetBusy plc,
Ascot Racecourse Betting and
Gaming Ltd, Kwalee Ltd and
BlueBet Pty.
Director of Turnkey Group
(UK Holdings) Limited, Cyber
Q Group Holdings Ltd and
SkyFarer Ltd.
Non-executive chair of
Made Tech Group Plc. Non-
executive director and senior
independent director of Henry
Boot Plc.
Non-executive director of
Gateley (Holdings) Plc, Pollen
Street Group Limited and
Morson Group Limited.
Director of Belvedere
Communications.
Committee
Memberships
None. None. None. Chair of the Nomination
Committee.
Chair of the Remuneration
Committee; Member of the
Audit & Risk and Nomination
Committees.
Chair of the Audit & Risk
Committee; Member of the
Remuneration and Nomination
Committees.
Member of the Audit &
Risk and Remuneration
Committees.
Skills Shipbroking, leadership,
mergers & acquisitions,
business development, sales,
marketing, investor relations,
strategy.
Finance, investor relations,
mergers & acquisitions,
strategy and risk management.
Mergers & acquisitions,
business development,
compliance and sales.
Leadership, strategy, business
development, mergers &
acquisitions, investor relations,
finance and governance.
Governance, compliance,
financial reporting, investor
relations, equity fundraising.
Capital markets, equity
fundraising, mergers &
acquisitions, strategy and
growth companies.
Corporate communications,
investor and media relations,
equity capital markets, and
organisational development.
Financial Statements
Braemar Plc Annual Report and Accounts 2024
55
Strategic Report Governance
James Gundy
Group Chief
Executive Officer
Grant Foley
Group Chief
Financial Officer
Tris Simmonds
Group Chief
Operating Officer
Nigel Payne
Chairman of the board
Elizabeth Gooch MBE
Non-executive director
&SID (from 1 April 2022)
Joanne Lake
Non-executive director
Cat Valentine
Non-executive director
Appointment date 1 January 2021 1 August 2023 1 August 2021 1 May 2021 1 August 2021 1 March 2022 16 May 2023
Background and
relevant experience
James has over 35 years’
shipbroking experience
specialising in Tankers,
Long Term Time Charter
and Sale and Purchase/
Newbuilding projects. He
joined the Company in 2014
as Chief Executive Officer
of Shipbroking following
the merger of Braemar Plc
and ACM Shipping Group
Plc, where James was the
Chief Executive Officer
of ACM Shipping. James
was an integral part of the
successful integration of the
two businesses which led to
his appointment as Group
Chief Executive Officer in
January2021.
Grant has over 25 years’
experience in leading public
and private financial services
and technology businesses.
He joined the Company from
ClearScore. As Chief Financial
Officer at ClearScore, he drove
significant improvements
across the finance function,
implementing new systems,
processes and reporting as
the business scaled. Grant
also has additional transaction
experience, and his other roles
have included CMC Markets
Plc where, as Group Chief
Financial Officer and Chief
Operating Officer, he was
instrumental in the company’s
successful IPO.
Tris has over 30 years’
experience in the commodities
industry, including 14 years
at GFI Group where he
became Head of European
Commodities. Tris founded
Atlantic Brokers in 2013 which
was sold to Braemar Plc in
2018. Since the acquisition
in 2018, Tris held the position
of Managing director
of Braemar’s derivative
brokerage business and he
was appointed as Group
Chief Operating Officer in
August2021.
Nigel joined the Company as
non-executive Chairman in May
2021. Nigel has a proven record
of enhancing shareholder value
with over 30 years’ experience
on international public and
private boards as both an
executive and non-executive
director. Nigel is a qualified
chartered accountant.
Elizabeth has over 18 years’
experience in governance,
compliance and financial
reporting of publicly listed
companies, having founded
and run EG Solutions plc.
Elizabeth works with founders
of UK tech startups and
scaleups to help them grow
and scale their businesses.
She is an angel investor, non-
executive director and mentor
to technology companies
in a wide range of sectors,
including secure messaging,
cyber security, artificial
intelligence, robotic process
automation and e-commerce.
Joanne has over 35 years’
experience in financial and
professional services – both in
investment banking, with firms
including Panmure Gordon,
Evolution Securities and
Williams de Broe, and in audit
and business advisory services
with Price Waterhouse.
Joanne is a qualified chartered
accountant and fellow of
the Chartered Institute for
Securities & Investment.
Cat was appointed to
the board in May 2023.
She is a communications
professional with over 25
years’ experience, advising
small-cap growth companies
on investor and corporate
communications. She joined
the strategic communications
advisory business, Belvedere
Communications, in 2017,
where she is director and
co-owner.
External
appointments
None. None. None. Non-executive chairman of
Gateley Holdings Plc and
Green Man Gaming Ltd.
Non-executive director of Sun
International Ltd, GetBusy plc,
Ascot Racecourse Betting and
Gaming Ltd, Kwalee Ltd and
BlueBet Pty.
Director of Turnkey Group
(UK Holdings) Limited, Cyber
Q Group Holdings Ltd and
SkyFarer Ltd.
Non-executive chair of
Made Tech Group Plc. Non-
executive director and senior
independent director of Henry
Boot Plc.
Non-executive director of
Gateley (Holdings) Plc, Pollen
Street Group Limited and
Morson Group Limited.
Director of Belvedere
Communications.
Committee
Memberships
None. None. None. Chair of the Nomination
Committee.
Chair of the Remuneration
Committee; Member of the
Audit & Risk and Nomination
Committees.
Chair of the Audit & Risk
Committee; Member of the
Remuneration and Nomination
Committees.
Member of the Audit &
Risk and Remuneration
Committees.
Skills Shipbroking, leadership,
mergers & acquisitions,
business development, sales,
marketing, investor relations,
strategy.
Finance, investor relations,
mergers & acquisitions,
strategy and risk management.
Mergers & acquisitions,
business development,
compliance and sales.
Leadership, strategy, business
development, mergers &
acquisitions, investor relations,
finance and governance.
Governance, compliance,
financial reporting, investor
relations, equity fundraising.
Capital markets, equity
fundraising, mergers &
acquisitions, strategy and
growth companies.
Corporate communications,
investor and media relations,
equity capital markets, and
organisational development.
The Chairman leads the board and is responsible for its overall effectiveness in
directing the Company, taking into account the interests of the Company’s various
stakeholders. The Group Chief Executive Officer leads the executive and divisional
management in the development of strategy and the management of all aspects of
the performance and operations of the Company and its subsidiaries.
Braemar Plc Annual Report and Accounts 2024
56
Report of the Audit & Risk Committee
Joanne Lake
Chair of the Audit & Risk Committee
The Audit & Risk Committee continues
to focus on the quality of our financial
reporting, and the robustness of our
financial controls and risk management.
The overall role of the Audit & Risk Committee (the
“Committee”) during the financial year was largely unchanged
from previous years. The Committee’s remit includes: financial
reporting, internal control and risk management, compliance
and internal/external audit. The Committee comprises three
independent non-executive directors and its terms of reference
can be found in the Investors section of the Company’s
website. The Committee is chaired by non-executive director
Joanne Lake. Joanne is a highly experienced chartered
accountant with a strong financial background and, with
the complementary skills of the other members, continues
to ensure that the Committee has a sufficient level of both
financial and relevant sector experience. Cat Valentine joined
the Committee upon her appointment to the board on 16 May
2023. The qualifications and experience of the members of the
Committee can be found in the director biographies on pages
54 to 55 of this Annual Report.
Only members of the Committee have the right to attend
meetings; however, standing invitations were extended to
the Chairman, Group Chief Executive Officer, Group Chief
Operating Officer, Group Chief Financial Officer, Group Financial
Controller, Group Finance Director, Company Secretary, Head of
Internal Audit and Risk Management and representatives of the
external auditor. The Company Secretary acted as secretary
to the Committee. The internal and external auditors attended
Committee meetings and periodically met in private with the
Committee Chair to discuss matters relating to the Committee’s
remit and issues arising from their work. Due to the internal
independent investigation, the Committee held additional
meetings during the year as required. The Committee held
eight meetings during the year, the attendance of which was
as follows:
Meeting attendance
Attended
Joanne Lake 7/8
Elizabeth Gooch 8/8
Cat Valentine
1
7/7
1 Cat Valentine joined the Committee on 16 May 2023 upon her appointment
to the board.
The key function of the Committee is to address the following
specific responsibilities, while adapting its activities as
appropriate to address changing priorities within the business:
– Financial reporting: reviewing the published half-year and
annual Financial Statements and reports, and any other
formal announcement relating to the Group’s financial
performance, and advising the board on whether such
information represents a fair, balanced and understandable
assessment of the Company’s position and prospects;
monitoring compliance with relevant statutory reporting and
listing requirements; reviewing and considering any changes
in accounting standards; and considering the suitability of,
and any changes to, accounting policies used by the Group,
including the use of estimates and judgements.
– Internal control and risk management: reviewing the
adequacy of the Group’s internal controls; assisting the
board in conducting a robust assessment of the Company’s
emerging and principal risks; and monitoring the scope
and effectiveness of the activities of the Group’s internal
audit activities in the context of the Group’s overall risk
management framework. As part of this responsibility,
the Committee receives reports from the Risk Committee
and regularly reviews the Group’s compliance policies and
procedures, including those relating to whistleblowing, the
prevention of bribery, corruption and fraud, and the Group’s
Know Your Client (“KYC”) processes.
– Reviewing and monitoring the effectiveness of the
external audit process and the independence of the
external auditor: conducting the tender process to appoint
an external auditor and making recommendations to the
board on the appointment, reappointment and removal of
the external auditor; planning with the external auditor the
half-year review and full-year audit programme, including
agreement as to the nature and scope of the external audit
as well as the terms of remuneration in the context of the
overall audit plan; monitoring the ongoing effectiveness
of the external auditor; monitoring the objectiveness and
independence of the external auditor; and approving and
monitoring any non-audit services undertaken by the
external auditor, together with the level of non-audit fees.
The following sections describe the work of the Committee
during the year ended 29 February 2024.
Financial Statements
Braemar Plc Annual Report and Accounts 2024
57
Strategic Report Governance
Review of Financial Statements
The Committee monitors the integrity of the Company’s
Financial Statements and has reviewed the presentation of
the Group’s interim and annual results. As part of this review,
it considered matters raised by the Group Chief Financial
Officer, together with reports presented by the external
auditor summarising the findings of their annual audit and
interimreviews.
The key areas of estimates and judgements considered for the
year ended 29 February 2024 are:
– Impairment of goodwill
Determining whether goodwill is impaired requires an
estimation of the value-in-use of the cash-generating units
to which these assets have been allocated. The value-in-
use calculation estimates the present value of future cash
flows expected to arise for the cash-generating unit. The
key estimates are therefore the selection of suitable discount
rates and the estimation of future growth rates which vary
between cash-generating units (“CGUs”) depending on the
specific risks and the anticipated economic and market
conditions related to each cash- generating unit. Climate
change risk has been taken into account in determining the
underlying inputs used in calculations used for impairment
reviews and is not considered to have a material impact on
the value-in-use calculations.
Following the impairment of goodwill relating to the
Corporate Finance business in the prior year, the
assumptions around value-in-use are most sensitive for
the remaining carrying amount of goodwill. The Committee
considered the work undertaken to support the discount
rate, the growth assumptions and the potential impact
of climate change and is satisfied these estimates are
appropriate. The result of this work indicated that the
Group’s carrying value of goodwill is supported by the value-
in-use estimates and no impairments are required. This work
is described in Note 3.1 to the Financial Statements.
– Fair value of VertomCory contingent consideration
The estimate at the balance sheet date of the fair value
of the earnout payments is £1.1 million, a increase of
£0.3 million from the previous year, reflecting the first earnout
payments received in May 2023 along with a gain of £0.1
million recognised in the current year. The fair value of the
earnout payments involves two critical estimates: the future
profitability of the combined business and the discount
rate used to calculate the net present value. The future
profitability forecasts are based on an updated business
plan prepared by the combined VertomCory business
following the first ten months of trading as a combined
entity. The discount rate was used to calculate the net
present value which was based on the credit risk
of Vertom Agencies BV following a credit check performed
by management.
The Committee reviewed the assumptions on future
profitability and considered the most recent budget
provided by the combined VertomCory business. The
Committee concluded that management’s estimates are
appropriate and that the carrying value of the earnout
payment is reasonable.
– Share option vesting
The fair value determined at the grant date of the equity-
settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate
of the number of equity instruments that will eventually vest.
At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest as a result of
the effect of non-market-based vesting conditions.
The Committee is satisfied that the processes to determine the
effect of non-market-based vesting conditions are appropriate.
– Provision for impairment of trade receivables and accrued
income
The provision for impairment of trade receivables and
accrued income represents management’s best estimate at
the Balance Sheet date. Several judgements are made in the
calculation of the provision, primarily the age of the invoice,
the existence of any disputes, recent historical payment
patterns and the debtor’s financial position. Further details
can be found in Note 4.2 to the Financial Statements.
The Committee reviewed management’s process for
determining the provision and was satisfied that the
judgements are appropriate.
– Valuation of defined benefit pension scheme
The Group uses an independent actuary to provide
annual valuations of the defined benefit pension scheme.
The actuary uses a number of estimates in respect of
the scheme membership, the valuation of assets and
assumptions regarding discount rates, inflation rates and
mortality rates. The membership details are provided by
an independent trustee while the valuation of assets is
verified by an independent fund manager. The discount
rates, inflation rates and mortality rates are reviewed by
management for reasonability. Further details can be found
in Note 5.1 to the Financial Statements.
The Committee considered the review work performed
by management in respect of the estimates made by the
independent actuary and the information provided by the
independent trustee and is satisfied with the process.
Judgements
– Revenue recognition
IFRS 15 “Revenue from Contracts with Customers” requires
judgement to determine whether revenue is recognised
at a “point in time” or “over time”, as well as determining
the transfer of control for when performance obligations
are satisfied.
The Committee considered the work done to validate
the accuracy of revenue transactions and is satisfied
that management’s judgement on the timing of revenue
recognition is materially correct.
– Classification and recognition of specific items
The Group excludes specific items from its underlying
earnings measure; management judgement is required as
to what items qualify for this classification. Each item reported
as specific is either directly related to acquisitions or not
deemed to be related to the trading performance of the
business. Further details can be found in Note 2.2 to the
Financial Statements.
The Committee reviewed the items for reasonableness and
consistency and is satisfied with management’s classification.
– Recoverability of defined benefit pension scheme
net asset
As a result of actuarial movements during the period,
including an increase in the discount rate from 4.9% at 28
February 2023 to 5.0% at 29 February 2024, the UK defined
benefit scheme continues to be in an actuarial surplus
position, net of tax, at 29 February 2024 (measured on an
IAS 19 “Employee Benefits” basis) of £1.4 million (28 February
2023: £1.1 million). The surplus has been recognised on the
basis that the Group has an unconditional right to a refund,
assuming the gradual settlement of Scheme liabilities over
time until all members have left the Scheme.
Braemar Plc Annual Report and Accounts 2024
58
Judgements continued
The Committee reviewed the terms of the scheme and
the discount rate used to estimate the value of the assets
and liabilities of the scheme and has concluded that the
recognition of the surplus was reasonable.
– Climate-related risks
Management has considered the impact of climate-related
risks in respect of impairment of goodwill, and recoverability
of receivables in particular and does not consider that
climate-related risks have a material impact on any key
judgements, estimates or assumptions in the consolidated
Financial Statements. The potential impact of climate
change has been reviewed by the Risk Committee and has
been identified as an emerging risk for the shipping and
energy sectors within which the Group operates, but not
one which is likely to have an impact on the business in the
short to medium term.
The Committee has also assessed the short-to-medium-
term impact relating to climate change risks and it is not
expected that climate-related risks will have a material
impact on the Group’s short-term financial performance.
– Going concern and viability
The Group has drawn up its accounts on a going concern
basis and the directors have assessed the viability of the
Group over a four-year period. As in previous years, a four-
year timeframe is still considered to be appropriate as
this is consistent with the Group’s long-term strategic
planning period.
The Committee received reports to support these matters
and considered the assumptions made, the sources
of liquidity and funding, the risks and sensitivities to the
forecasts and the stress tests used, including the potential
impact from the investigation. The Committee concluded
that the application of the going concern basis for the
preparation of the Financial Statements is appropriate. More
detail can be found in the Principal risks and uncertainties
section of this Annual Report.
– Internal independent investigation provision
In June 2023, the board commissioned an internal
independent investigation into an historical transaction from
2013. The investigation was overseen by an Investigation
Committee chaired by the Group’s non-executive Chairman
and was conducted by an independent specialist forensic
accounting firm, and independent external counsel. The
investigation was comprehensive and complex and
ultimately focused on a review of several transactions
between 2006 and 2013.
As a result of the investigation, the Group has recognised
a provision of £2.0 million in relation to the uncertain
obligations connected to a number of the transactions and
commission obligations reviewed as part of the investigation.
Of the £2.0 million, £1.7 million related to historical unsettled
commission payable, which was reclassified from trade
payables to provisions in FY23. During the year, £0.2 million
was added to the provision following the return of previously
paid amounts connected to the uncertain commission
obligation. While the board cannot forecast with certainty
final outcomes in respect of these obligations, based on the
Group’s current information, the amount recognised is the
current best estimate of the amount required to settle the
obligations at the balance sheet date, taking into account
the risks and uncertainties surrounding the obligations,
including interpretation of specific laws and likelihood
of settlement.
Capital reduction and dividend rectification process
In December 2022, the Company commenced a project to
research options for increasing the distributable reserves
available to the Company in order to support the Group’s
stated progressive dividend policy. The initial focus was on
short-term options that would increase the distributable
reserves as at 28 February 2023 in order to allow a final
dividend recommendation with the publication of year-end
results later in 2023. A review of these short-term options
identified that charges taken to retained earnings in recent
years for the impairment of the value of certain preference
shares held by the Company represented unrealised losses
and could therefore potentially be excluded from the calculation
of distributable reserves. While reviewing the possibility that the
impairment losses could be determined as unrealised losses
for the purpose of measuring distributable reserves, a broader
review of other gains and losses that had been recorded in
retained earnings in recent years was carried out.
This review identified certain gains that had been recorded
regularly relating to share-based payments charges. The gains
in question arose when shares were awarded to employees
of other Group companies and the cost of those shares
increased the cost of investment of those Group companies
and retained earnings. This review led the Company to identify
that a significant balance within retained earnings (that was
not previously identified as created by unrealised gains) was
incorrectly used by the Company in the calculation of its
distributable reserves. This meant that the Company paid
several dividends between 2016 and 2023 without having
sufficient distributable reserves from which to lawfully pay
such dividends. Full details of the historic relevant dividends
are set out in the circular posted to shareholders dated
29 March 2023. The Company convened a General Meeting
which was held on 18 April 2023 where shareholders
voted in favour of all the capital reduction and dividend
rectification special resolutions put forward by the board.
With the confirmation of the Court, the Company cancelled
its share premium account and capital redemption reserve.
The Company then applied the sums resulting from this
cancellation reduction to its distributable reserves.
Control environment and financial processes
Throughout the year, the Committee continued to monitor
the work to strengthen the control environment and financial
processes. An experienced Group Financial Controller joined
the team in FY23 and good progress was made throughout the
year with additional resource recruited into the Finance team,
including a Senior Financial Planning and Analysis Manager,
Group Head of Tax & Treasury and additional qualified
accountants in different areas within the team. In addition, the
Group’s Chief Financial Officer, appointed in August 2023, has
been a great addition and is leading the work to strengthen
the Finance function. Work is ongoing to strengthen the regular
review and financial control processes and improve the use
of the financial systems available. A particular focus is being
given to the consolidation system as weaknesses identified
in prior years related to the consolidation of the Group’s results
in the context of disposals and acquisitions rather than
ongoing trading.
Report of the Audit & Risk Committee continued
Financial Statements
Braemar Plc Annual Report and Accounts 2024
59
Strategic Report Governance
Internal independent investigation
The internal independent investigation referenced in the
Chairman’s Statement on pages 5 to 6 highlighted improvements
that were required in the Compliance function, particularly around
“Know Your Customer” (“KYC”) checks and ongoing monitoring.
The Group has acted promptly to address the weaknesses
identified and has implemented new procedures and an ongoing
improvement plan with oversight from the Audit & Risk Committee.
While the investigation identified historic issues, the current year
work and ongoing monitoring to date has identified no additional
matters of concern.
External audit
BDO LLP was reappointed as external auditor at the 2023
AGM for their sixth year as auditor to the Group. The lead audit
partner at BDO LLP responsible for the external audit is Oliver
Chinneck. Oliver was a key audit partner in the previous five
years and took over the lead role in FY23 and will have served
six years following the conclusion of the FY24 year-end audit.
In line with the independence requirements, Oliver should have
rotated after five years. However, following the matters which
arose in the FY23 year-end audit and the change in Group
Chief Financial Officer, to maintain audit quality, the Audit &
Risk Committee wrote to BDO’s ethics partner to request that
Oliver’s tenure as lead audit partner be extended by a year.
Following review, BDO agreed to the one-year extension for the
FY24 audit and put in place effective safeguards to maintain
independence. A new audit partner has been appointed for the
FY25 year-end audit.
The Group has a clear policy for the approval of non-audit
services. Any services BDO provides that are not part of the
statutory year-end audit are subject to a cap of 70% of the
average of the previous three consecutive years of statutory
audit fees. The external auditor is only appointed to perform a
non-audit service when doing so would not compromise their
independence, and when their skills and expertise make them
the most suitable supplier. The Group policy for the approval
of non-audit services requires the Committee’s prior approval
of all non-audit services. This year, fees for non-audit services
represent 8% of the total fee paid to BDO LLP (FY23: 12%). The
Committee also continues to agree the scope and related fee
for the annual external audit. The non-audit services performed
during the year related to the half-year review, the dividend
rectification and capital reduction process.
The Committee additionally monitors the independence
of the external audit function, as well as its objectivity and
effectiveness, through the annual schedule of meetings (at
which it discusses the auditor’s reports and performance),
through inviting feedback from those involved with the external
auditor’s work across the business, and through additional
meetings between the Chair of the Committee and the lead
audit partner.
Internal audit
Internal audit is an independent assurance function which
supports Braemar in improving its overall control framework.
The work of the internal audit function supports Braemar
to evaluate and improve the design and effectiveness
of the risk management framework, internal control, and
governance processes. The Audit & Risk Committee defines
the responsibility and scope of the internal audit function and
approves its annual plan. Reporting to the Chair of the Audit
& Risk Committee and administratively to the Group Chief
Financial Officer, the Head of Internal Audit & Risk leads the
Internal Audit & Risk Management function.
The Audit & Risk Committee monitors the delivery of the
internal audit plan throughout the year and provides challenge
to ensure that management is sufficiently responsive to any
audit findings.
Business functions, processes and areas forming part of the
rolling three-year risk-based Group internal audit plan are
based on assessment of risks to the business, as described on
pages 43 to 49 of this Annual Report. The plan is reviewed and
updated at least annually to help ensure key Group and new
or emerging risks receive appropriate and timely audit focus.
Updates or changes to the audit plan, and internal audit reports,
are reviewed by the Audit & Risk Committee during the year.
The Group’s operational and functional management teams
are engaged and involved in the risk assessment process and
in the development of the internal audit plan by way of the
following activities:
– Risk Committee meetings to agree and coordinate
compliance, risk management, and to provide input into
internal audit activity;
– submission of operational and financial senior management
confirmations that the results of their respective business
areas are accurate, that stated levels of debtors and
accrued income are recoverable, adequate provisions have
been made for uncollectible amounts, and that the business
complies with the Group’s position on the UK Bribery Act
and there have been no breaches of applicable sanctions;
– completion of semi-annual control self-assessment
questionnaires by all Group entities to help ensure that
adequate controls are in place. Completed questionnaires
are reviewed and discussed with senior management for
their respective business areas; and
– suggestions for internal audit activity are sought from each
business area, and operational and functional departments.
Audits were conducted this year on sanctions, expenses,
Singapore and integrated assurance. Management action plans
were developed and agreed with action implementation dates
for identified control gaps or deficiencies. Progress against
agreed management actions from audits is monitored through
regular updates to the Audit & Risk Committee.
Review by the Financial Reporting Council (“FRC”)
The Financial Reporting Council (“FRC”) carried out a
review of Braemar’s interim results for the six months ended
31 August 2022 in accordance with Part 2 of the FRC’s
Corporate Reporting Review Operating Procedures. Based on
their review, there were no questions or queries they wished
to raise with the Company. They did, however, highlight items
where they believed that the readers of the accounts would
benefit from improvements. The letter was duly acknowledged
and the Group has considered the recommendations in the
letter in the preparation of the Company’s Annual Report.
Braemar Plc Annual Report and Accounts 2024
60
Report of the Audit & Risk Committee continued
Risk and internal control framework
During the year, the Audit & Risk Committee continued its focus
on review and enhancement of the Group’s risk and internal
control framework. Braemar is committed to the highest
standards of conduct in all aspects of its business. In reviewing
and improving this framework of policies, processes and
procedures, the directors remained mindful of the potentially
competing interests of the Company’s stakeholders, particularly
the need to balance cost, resource, and the interests and
perspectives of clients and other market participants with the
need to maintain its reputation for integrity and to comply with
international laws and best practice. This review, and the Audit
& Risk Committee’s ongoing responsibilities in this area, saw
the Audit & Risk Committee involved in:
– reviewing the work of the Risk Committee, particularly on
matters such as the regular reviews of the Group’s emerging
and principal risks and the development of its enhanced risk
management framework;
– reviewing and improving the Group’s framework of
compliance policies and procedures, including in relation to
sanctions, bribery and corruption, conflicts of interest, KYC,
entertainment, meals, gifts, tax evasion, and whistleblowing;
– reviewing the design of a comprehensive programme of
compliance training for all staff;
– reviewing the financial reporting framework and improving
the processes for regular reporting of key financial
judgements and estimates, as well as other elements of risk
management across the business;
– reviewing the Group’s IT cyber security monitoring and
planning programme;
– reviewing the Group’s insurance coverage; and
– reviewing the Group’s foreign exposure and hedging strategy.
More information on the Group’s emerging and principal risks,
including a summary of the principal risks facing the Group and
how these are managed, can be found on pages 43 to 49 of
the Annual Report.
Joanne Lake
On behalf of the Audit & Risk Committee
22 May 2024
Financial Statements
Braemar Plc Annual Report and Accounts 2024
61
Strategic Report Governance
Report of the Nomination Committee
The primary responsibilities of the Nomination Committee are
to ensure that the board and its committees have the right
composition, to lead the process for appointments to the
board, and to ensure that the Company has appropriate plans
in place for succession to the board and senior management
roles. The Committee’s terms of reference can be found in the
Investors section of the Company’s website.
I chair the Nomination Committee and it comprises three
independent non-executive directors. The Committee met
three times during the year to consider board appointments,
succession planning and the board evaluation review, the
attendance of which was as follows:
Meeting attendance
Attended
Nigel Payne 3/3
Elizabeth Gooch 3/3
Joanne Lake 3/3
Board changes
Following Stephen Kunzer’s departure from the board in
January 2023, the Committee led the search to appoint a
non-executive director to the board. This search comprised a
review across a wide-ranging number of industry sectors from
both internal and external sources. In considering the optimum
criteria and attributes for this role, the Committee considered
the existing structure and diversity of the board and senior
management, the culture of the organisation and the focus
of the Group’s future strategy and the existing commitments
of potential candidates. The Committee agreed that it was
important to add incremental skills to the board. In May 2023,
the Committee was delighted to recommend Cat Valentine
for appointment to the board; Cat was duly appointed to the
board for a three-year term subject to annual re-election by
shareholders with effect from 16 May 2023. In June 2023, the
Committee was pleased to recommend the appointment
of Grant Foley as Group Chief Financial Officer. Grant joined
the board with effect from 1 August 2023. Nicholas Stone left
the business on 31 July 2023. Further detail on the skills and
experience that both Cat and Grant bring to the board and
the Company are set out in the section 172 statement on
pages 28 to 29.
Succession planning
The Nomination Committee’s succession planning has two
key areas of focus: firstly, to ensure that the board has the right
combination of skills, experience, knowledge and independence;
and secondly, to ensure that the Company has plans in place for
orderly succession. This includes the development of a diverse
talent pipeline for the Company’s senior management and more
broadly across the Group.
The Committee manages the former through its rigorous and
formal approach to new board appointments and regularly
challenges the directors to consider the size and composition
of the board and the appropriate range of skills and balance
between executive and non-executive directors through an
evaluation process.
The Committee manages the second area through the review of
the succession plans in place for senior management across the
Group. As part of this, the Committee challenges the executive
directors and senior management across the business to present
detailed insights into the organisational structures and personnel
profiles of the businesses and how they look to develop key
talent and mitigate succession risk. More information on how the
Company invests in the training and development of its people can
be found on page 39 of this Annual Report. Where necessary, the
Company also considers how best to fill potential vacancies with
external candidates.
In both of these areas, the Committee ensures that the directors
and senior management remain mindful of the Group’s diversity
policy. Braemar recognises the importance of diversity in
all respects, including (but not limited to) gender, skills, age,
experience, ethnicity and background. The Committee believes
that diversity and an inclusive culture are important contributors
to a company’s ability to achieve its strategic objectives and
deliver long-term, sustainable success. As at the date of this
Report, approximately 17% (FY23: 26%) of the Group’s Executive
Committee and its members’ direct reports are female and three
of the seven board positions are occupied by female board
members. During the year, the composition of the executive
committee was revised and it now comprises the Group Chief
Executive Officer (who chairs the committee), the Group Chief
Operations Officer and the Group Chief Financial Officer. More
information on the Group’s policies and approach on diversity
can be found in the Culture and values section earlier in this
Corporate Governance Report and in the EPSG Report on pages
30 to 41 of this Annual Report.
Board evaluation
In early 2024, we conducted internal board and committee
evaluations, a process which I led with the support of
the Company Secretary. An important component of this
process was the completion of a set of questionnaires by
the directors to record their views on a range of matters
and to act as a catalyst for broader feedback. As with the
prior year, the Committee agreed that the board evaluation
exercise could be effective without the need for any external
facilitation. The review identified that while the board and its
committees continued to operate effectively, certain areas of
focus were highlighted. The specific actions that the board
and its committees will be taking during the forthcoming
year include: ensuring the board maintains the focus on
the Company’s long-term strategy, continuing its work to
enhance the quality of board reporting and board discussions,
developing resources to support directors in refreshing their
skills and knowledge and greater focus on Braemar’s risk
management and internal audit functions. I continue to work
with the other directors and the Company Secretary to improve
the effectiveness of the board and its committees and we will
report on progress against actions in the FY25 Annual Report.
Nigel Payne
On behalf of the Nomination Committee
22 May 2024
Nigel Payne
Chairman of the
Nomination Committee
Braemar Plc Annual Report and Accounts 2024
62
Directors’ Remuneration Report
Elizabeth Gooch
On behalf of the Remuneration Committee
The Committee is focused on retaining
our executive directors and appropriately
incentivising them to deliver shareholder value.
On behalf of the board, I am pleased to introduce the
Directors’ Remuneration Report for the year ended 29 February
2024. As in past years, the first section of this introductory
statement details the work of the Committee together with our
remuneration philosophy, which remains unchanged. I will then
go on to describe how we paid our executive directors in the
year in the context of Company performance, and to introduce
the remuneration items for which we are seeking shareholder
approval at our 2024 AGM.
The Remuneration Committee and its work
The Remuneration Committee is appointed by the board and
comprises three independent non-executive directors. The
non-executive Chairman is not a member of the Committee.
The Committee is chaired by Elizabeth Gooch and its terms
of reference can be found in the Investors section of the
Company’s website. The Committee’s main responsibilities
areto:
– determine the Policy and framework for executive
remuneration;
– set the remuneration for the executive directors, the
Chairman and the Group’s senior management;
– review remuneration and related policies for employees
across the Group; and
– approve the design of, and determine targets for,
performance-related incentive schemes and/or equity
participation schemes across the Group.
In discharging these responsibilities, the Committee may call
for information and advice from advisers inside and outside
the Group. During the year, the Committee took advice from
the Chairman, the Group Chief Executive Officer, the Group
Chief Operating Officer, the Group Chief Financial Officer and
the Company Secretary, who all attended various meetings at
the invitation of the Committee, but did not participate in any
decision making, nor were they present for any discussions
regarding or affecting their own remuneration.
The Committee received independent remuneration advice
from FIT Remuneration Consultants LLP (“FIT”) on a range of
matters within the Committee’s remit, for which fees of £42,585
(excluding VAT and disbursements and calculated on a time-
spent basis) were charged during the year. FIT is a member of
the Remuneration Consultants Group and, as such, voluntarily
operate under the Code of Conduct in relation to executive
remuneration consulting in the UK. FIT were also engaged to
provide advice in relation to the operation of the Company’s
share plans, and the Committee is comfortable that the FIT
team continues to provide objective and independentadvice.
Remuneration philosophy
The Committee’s approach to executive remuneration
remains unchanged. The pay structures in our sector are
atypical compared with the norm of executive pay at UK listed
companies. However, they are proven to work within Braemar
as well as being accepted practice across the shipbroking
sector and other commission-based businesses. The board still
considers that the business is better served by the CEO and
COO leading the broking divisions (rather than a non-broking
CEO and COO being appointed).
The Committee is focused on retaining our executive directors
and appropriately incentivising them to deliver shareholder
value, while also being mindful of best practice and market
trends (including the guidelines of investor bodies). In FY24, the
Committee worked within the shareholder-approved Policy to
reward our executive directors.
Our framework is based on five core principles:
– Market competitiveness: the success of our business is
entirely dependent upon the experience and skills of our
employees and management team, the specialist advice
they offer, and the relationships that they develop with
our clients. The structures, designs and quantum of our
remuneration arrangements must be sufficient to allow us
to retain our team and compete in highly competitive global
talent markets.
– Proportionality and alignment to performance: we
seek to pay no more than is necessary and also ensure
that a substantial portion of executive reward is aligned to
both profitability and delivery of strategy. In line with our
competitors, we operate profit-sharing arrangements for
those individuals engaged in broking activities.
– Simplicity and transparency: our executive remuneration
structures must be clear and understandable for
participants and other stakeholders.
– Alignment with shareholders: we align long-term rewards
with the long-term value of our shares through share
ownership guidelines and share-based remuneration.
– Alignment with culture and risk appetite: we ensure that
remuneration drives the right behaviours to support our
strategy and reflects our values, including the identification
and mitigation of any risks that could arise from our
incentive plans.
Financial Statements
Braemar Plc Annual Report and Accounts 2024
63
Strategic Report Governance
Activity during the year
This year has been another busy one for the Committee, with
seven meetings being held, the attendance of which was as
follows:
Meeting attendance
Attended
Elizabeth Gooch 7/7
Joanne Lake 7/7
Cat Valentine
1
6/6
1 Cat Valentine joined the board on 16 May 2023.
Our performance in FY24 and our review of the
Directors’ Remuneration Policy
Wider context – our performance in FY24
As more fully detailed in the Chairman’s statement on pages
5 to 6 and the Group Chief Executive Officer’s statement on
pages 12 to 13, FY24 was another year of strong revenue and
underlying operating profit for the Group:
– FY24 revenues were sustained at £152.8 million and
profitability remained strong (£16.5 million underlying
operating profit).
– Our results illustrate the successful delivery of our strategy to
continue to grow the business, build resilience and generate
sustainable shareholder returns across the shipping cycle.
– Our balance sheet remains strong, and the Group’s positive
cash position has been maintained.
– We maintained our progressive dividend policy with total
dividends per share for the year of13 pence, an 8% increase
over the prior year dividend of12 penceper share.
The Committee believes that the performance of the Company
is testament to the strong execution of our clear growth
strategy which remains focused on our core Shipbroking
activities and complementary Securities business. This has
been the strategy of the business since January 2021 when our
Group Chief Executive Officer, James Gundy, was appointed,
with his combined role as both leader of our Shipbroking
business and CEO.
Performance and reward in FY24
Following another year of strong revenue and underlying
operating profit performance for the Group and given the
positive shareholder experience in the year, the Committee
approved the following bonuses for the executive directors:
– £2.35 million for James Gundy (Group Chief Executive
Officer).
– £1.125 million for Tris Simmonds (Group Chief Operating
Officer).
– £189,000 for Grant Foley (Group Chief Financial Officer).
Before confirming the outcomes for the FY24 annual bonuses,
the Committee considered the nature of the matters which were
investigated in FY24 and which necessitated the delay of the
FY23 Annual Report publication and the related suspension of
the Company’s shares from trading. The Committee determined
that the nature of the matters investigated should not impact
incentive plan outcomes given both their historical nature and
the steps taken by the current management team to swiftly
rectify and resolve these issues when they became apparent.
Implementation of our Policy in FY25
Our intention is for our Directors’ Remuneration Policy to
continue to apply consistently in FY25. This will involve
thefollowing:
– Base salaries: the base salaries of our CEO, COO and CFO
will, once again, remain frozen at the same levels as applied
in FY24.
– Annual bonus: our CEO and COO will again participate in
the Brokers’ Bonus which is driven by the profitability of the
broking desks and their respective contributions towards
this. In addition, part of the COO’s bonus will be judged
against non-financial metrics (relating to his leadership
of certain Group central functions and leadership on
acquisitions and other strategic projects); the weighting
of non-financial metrics for the COO will likely vary year to
year depending on the needs and priorities of the business.
Our COO plays a key role in identifying, developing and
delivering opportunities for the business to grow through
strategic hires and team acquisitions which complement
our core business. Successful and prudent pursuit of such
opportunities will benefit our shareholders in the long term
by adding further resilience, strength and depth to our
business. In line with our Policy, our CFO’s bonus will be
based on a combination of performance measures linked
to Group financial performance and the achievement of
strategy and operational objectives.
– LTIPs: we will again operate our LTIP plan in FY25, with
each of our executive directors receiving an LTIP award over
shares worth up to 100% of base salary.
Applying a consistent approach to our pay arrangements
provides clarity to our executive directors and has over time,
led to both our CEO and COO building significant shareholdings
in the Company. This provides very clear alignment of interests
between our executive directors and our shareholders.
In early 2024, following a benchmarking exercise, the base
non-executive director fees were reviewed and from March
2024 increased by £2,500 to £52,500 (£50,000 in FY24).
No other changes are proposed to the non-executive
director fees for FY25.
64
Braemar Plc Annual Report and Accounts 2024
Statement regarding 2023 AGM remuneration votes
The Committee noted and considered the voting outcomes for
the resolution to approve the Directors’ Remuneration Report
and Directors’ Remuneration Policy at our 2023 AGM. As the
Company disclosed in the announcement regarding the results
of the 2023 AGM, the board considers that the operation of
its remuneration practices are clearly in the best interests of
all stakeholders of the business and that the Remuneration
Committee has discharged its duties properly.
The board further noted that some of the votes against
the Directors’ Remuneration Report were cast as a result of
“vote against” recommendations being received from certain
proxy shareholder advisory services. From the Company’s
perspective, these recommendations did not take account
of the Company’s specific business model and governance
structures and were not informed by any direct engagement
with the Company.
We also note the recent comments by some of the main UK
investor representative bodies, who recognise that a “one size
fits all” approach towards executive remuneration is potentially
damaging to the competitiveness of UK listed companies,
especially in global businesses.
The board and the Remuneration Committee encourage an
open and constructive dialogue directly with its shareholders
and continue to be willing to engage with any shareholder
on any relevant topics should they so wish, including all
remuneration topics within the Committee’s remit.
Directors’ Remuneration Report continued
Format of the Report and matters to be approved
atour 2024 AGM
The remainder of this Report comprises two sections:
1. A summary of our Directors’ Remuneration Policy which
was approved at the 2023 AGM. This is included solely for
information purposes and the full Policy can be found within
the Company’s FY23 Annual Report, which is available on
the Company’s website; and
2. The Annual Report on Remuneration, which sets out the
details of how our Policy was implemented during FY24, and
the decisions taken in relation to the prospective application
of the policy in FY25.
At the 2024 AGM, shareholders will be asked to approve two
resolutions related to directors’ remuneration matters. These
resolutions are:
– to approve the Directors’ Remuneration Report (comprising
both the Annual Report on Remuneration and this
introductory statement); and
– to renew the Long-Term Incentive Plan.
The vote to approve the Directors’ Remuneration Report is
the annual advisory vote on such matters. We trust that our
shareholders will recognise the outstanding year of performance
delivered by our executive team and vote in favour of the
resolution to approve the Directors’ Remuneration Report.
The Long-Term Incentive Plan is our existing plan for the grant
of long-term incentive awards over Company shares. It was
first established in 2014 and, as is normal, the authority to
operate this plan must be renewed after ten years. There are
no material changes to the LTIP plan rules.
Elizabeth Gooch
On behalf of the Remuneration Committee
22 May 2024
Financial Statements
Braemar Plc Annual Report and Accounts 2024
65
Strategic Report Governance
Remuneration Policy
The Remuneration Committee is not proposing to make any changes to
the Policy approved by shareholders at the 2023 AGM. The full Policy is
contained on pages 69 to 78 of the Company’s 2023 Annual Report, and
canbe found on our website at http://braemar.com/investors/.
Key extracts of the current Policy are shown below for information.
Policy table for executive directors
Purpose and link to strategy Operation Maximum opportunity Performance measures
Base salary
To provide an element of
fixed remuneration as part
of a market-competitive
remuneration package to
attract and retain the calibre
of talent required to deliver
the Group’sstrategy.
Base salaries are determined
by the Committee, taking into
account:
– skills and experience of the
individual;
– size, scope and complexity
of the role;
– market competitiveness
of the overall remuneration
package;
– performance of the individual
andof the Group as a whole;
and
– pay and conditions
elsewhere in theGroup.
Base salaries are normally
reviewed annually with changes
effective from thestart of the
financial year.
While there is no defined
maximum, salaryincreases are
normally made withreference to
increases for the wideremployee
population.
The Committee retains discretion
toaward larger increases where
considered appropriate, to
reflect, forexample:
– Where an executive director
has had an increase in
responsibility.
– Where an executive director
has been promoted or has
had a change in scope.
– An individual’s development
or performance in role (e.g.
to align a newly appointed
executive director’s salary with
the market over time).
– Where an executive director’s
salary is no longer market
competitive (e.g. due to
an increase in size and
complexity of the business).
Increases may be implemented
over such time period as the
Committee deems appropriate.
None.
Braemar Plc Annual Report and Accounts 2024
66
Purpose and link to strategy Operation Maximum opportunity Performance measures
Benefits
To provide a market-
competitive benefits
package for the nature
andlocation of the role.
Incorporates various cash/
non-cash benefits which are
competitive in the relevant
market, and which may include
such benefits as a car (or car
allowance), club membership,
healthcare, life assurance,
income protection insurance,
and reimbursed business
expenses (including any
tax liability).
Where relevant, other benefits
on broadly the same terms as
provided to the wider workforce
or to reflect specific individual
circumstances, such as housing,
relocation, travel, or other
expatriate allowances may also
be provided.
Any reasonable business-related
expenses can be reimbursed
(and any tax thereon met if
determined to be a taxable
benefit).
Executive directors may also
participate in the Company’s
Save As You Earn (“SAYE”)
scheme on the same basis as
other employees and subject to
statutory limits.
Benefit provision, for which
there is no prescribed monetary
maximum, is set atan
appropriate level for the specific
nature and location of the role.
None.
Purpose and link to strategy Operation Maximum opportunity Performance measures
Pension
To provide a post-retirement
benefit to attract and retain
talent.
The Committee may offer
participation in a defined
contribution pension scheme
or provide a cash allowance.
The maximum contribution for
any executive director will be in
line with the level available for
the majority of UK employees
at any given time (currently 5%
of salary).
None.
Remuneration Policy continued
Financial Statements
Braemar Plc Annual Report and Accounts 2024
67
Strategic Report Governance
Purpose and link to strategy Operation Maximum opportunity Performance measures
Annual Bonus
To incentivise and reward
annual performance
aligned with the long-term
objectivesof individuals and
the delivery of strategy.
Deferral into shares
strengthens long-term
alignment with shareholders.
Executive directors are eligible
to participate in the annual
bonus at the discretion of the
Committee each year.
Where executive directors
undertake broking activities,
they may, at the discretion of
the Committee, be eligible to
participate in the brokers’ bonus
arrangements.
The brokers’ bonus is non-
contractual and is currently
calculated as a percentage of
profits from either personal and/
or desk revenues depending on
the role fulfilled.
Where executive directors
do not undertake broking
activities, they may participate
in an annual bonus for which
appropriate performance targets
are set at the outset of the year
in accordance with this Policy.
Payout levels for all executive
directors are determined by the
Committee after year-end.
A portion of the annual bonus
will be deferred into shares
under the Deferred Bonus Plan
(“DBP”), described in more detail
in the section below.
Clawback provisions will also
apply, as explained on page 74
of the 2023 Annual Report.
In line with market practice for
the Company’s peers, there is no
cap on individual brokers’ bonus
awards. However, the brokers’
bonus is funded by broking
profitability, and therefore any
amount is capped by the profits
generated by broking activities,
as well as the profitability and
financial position of the Group as
a whole.
Where executive directors do
not undertake broking activities,
the maximum annual bonus
opportunity is 100% of base
salary p.a.
Where executive directors
participate in the brokers’
bonus, this is currently
calculated as a percentage
of profits which, depending
on the individual’s role may
reflect either personal broking
and/or desk revenues.
However, the Committee may
also make a portion of the
brokers’ bonus for executive
directors subject to the
attainment of specific non-
financial or personal metrics.
Where executive directors do
not participate in the brokers’
bonus, the performance
measures applied may be
financial or non-financial,
corporate or individual, and
in such proportions as the
Remuneration Committee
considers appropriate for any
financial year.
For all executive directors,
the Committee retains
discretion to override any
formulaic bonus outcome,
if it considers it appropriate
to do so, to take account of
overall or underlying Group
or personal performance
or such other factors as
it considers relevant. The
Committee may also set
“gateways” or “underpins”
for elements of an executive
director’s bonus which must
be attained before that part
of the bonus is paid, should
the Committee consider
this appropriate.
Braemar Plc Annual Report and Accounts 2024
68
Purpose and link to strategy Operation Maximum opportunity Performance measures
Long-Term Incentive Plan (“LTIP ”)
To provide a variable
elementwhich aligns the
reward of all executive
directors withlong-term
performance delivered
forshareholders.
Awards are made under the
2014 Long-Term Incentive
Plan (“LTIP”) as approved by
shareholders at the 2014
Annual General Meeting.
Awards vest subject to
performance measured over a
period of at least three years.
Vested awards are subject to
an additional holding period
which, unless the Committee
determines otherwise, will run
up to the fifth anniversary of
the date of grant.
All executive directors are
eligible to participate each
year at the discretion of the
Committee.
The Committee retains the
discretion to override formulaic
vesting outcomes downward, if
it considers it appropriate to do
so, to take account of overall or
underlying Group or personal
performance or such other
factors as it considers relevant.
Awards are subject to clawback
provisions, as described in
more detail on page 74 of the
2023 Annual Report.
The usual maximum award
opportunity in respect of a
financial year is 100% of
base salary.
However, in circumstances
that the Committee considers
to be exceptional, awards of
up to 200% of base salary
may bemade.
Vesting is based on the
achievement ofperformance
targets set in respect of key
performance measures aligned
to the strategy and shareholder
value (currently underlying
earnings per share).
Up to 25% vests for threshold
performance.
The Committee retains
discretion to set alternative
measures and weightings
for awards over the life of
the Policy.
Targets for performance
measures are set and
assessed by the Committee
in its discretion.
Remuneration Policy continued
Financial Statements
Braemar Plc Annual Report and Accounts 2024
69
Strategic Report Governance
Purpose and link to strategy Operation Maximum opportunity Performance measures
Shareholding Requirements
In-employment shareholding
requirement.
To create greater alignment
between executive directors
and shareholders.
Executive directors are required
to build a shareholding of
100% of base salary. Shares
subject to unvested or vested
but unexercised awards
under the DBP and vested but
unexercised LTIP awards may
be included, in all cases on a
net of tax basis.
Executive directors will be
required to retain all of the
shares (net of tax) that vest
under the DBP and the
LTIP until the shareholding
requirement is met.
The Committee shall retain
a discretion to waive the
requirements, in whole
or in part, in exceptional
circumstances such as critical
illness or personal financial
hardship (including divorce).
Not applicable. Not applicable.
Post-employment
shareholding requirement.
To ensure continued
alignment of the long-
term interests of executive
directors and shareholders
post cessation.
Executive directors are
required to maintain a
shareholding equivalent to the
in-employment shareholding
requirement immediately prior
to departure (or the actual
share and award holding on
departure, if lower) for two
years post cessation. Shares
subject to unvested awards
under the DBP and vested but
unexercised LTIP awards may
be included, in both cases on a
net of tax basis.
The requirement will only apply
to shares vesting under DBP
and LTIP awards made from the
2020 AGM onwards and will
not apply to shares acquired
either from awards granted
before this date or from shares
purchased directly by the
executive director.
Not applicable. Not applicable.
Bonus deferral
A portion of the annual bonus will be deferred into shares under the DBP, the latest plan rules for which were approved by the
Company’s shareholders at the 2021 AGM. Such awards will vest, unless the Committee determines otherwise, after three years
from the date of grant, subject to continued employment with the Group.
For executive directors, the Company’s policy is to defer 10% of annual bonus outcomes each year under the DBP.
The Committee may determine that DBP awards are made in conjunction with the Company Share Option Plan (“CSOP”) to enable
UK tax resident individuals to benefit from the growth in value of the shares subject to the awards in a tax-efficient manner. In such
circumstances, when DBP awards are granted, a corresponding market value option will be granted under the terms of the CSOP,
the maximum, aggregate face value of which may be up to £60,000. The options will vest on the same terms as and on the same
date as the corresponding DBP awards. Under the terms of a CSOP, no income tax or employee’s or employer’s National Insurance
contributions will be payable, on exercise, on the growth in value of the shares. The number of shares in respect of which the DBP
awards will vest will be reduced to take account of the gain in value, as at exercise, of the corresponding CSOP options. CSOP
awards would only be made in conjunction with the DBP as described above, and not on a stand-alone basis.
Braemar Plc Annual Report and Accounts 2024
70
Clawback
Under the DBP and the LTIP, the Committee may reduce the number of shares subject to unvested awards and/or impose further
conditions on unvested awards (effectively “malus”) and/or require payments in cash or shares be made in certain circumstances
which include:
– a material misstatement or restatement of any financial results of the Company;
– a material failure of risk management by the Company or a relevant business unit;
– serious reputational or financial damage to the Company or a relevant business unit as a result of the participant’s misconduct
or failure of supervision;
– the discovery of facts that could have led to the dismissal of the participant prior to the vesting of the award;
– an error of calculation;
– the Company suffering corporate failure; or
– such other exceptional circumstances as the Committee considers relevant.
These terms may also apply in the case of the cash element of the annual bonus.
The relevant recovery periods are until the time of vesting of the relevant award in the case of DBP awards and at any time prior
to the second anniversary of vesting or payment of the award (as relevant) in the case of awards made under the LTIP and in the
case of the cash element of an annual bonus.
Policy table for the Chairman and non-executive directors
Purpose and
link to strategy Operation
Maximum
opportunity
To provide market-
appropriate fees
to recruit and
retain individuals
of the calibre
required to deliver
thestrategy.
The remuneration of the Chairman is determined by the Committee and
the remuneration of the non-executive directors is determined by the
board (excluding the non-executive directors).
Fees are normally reviewed on an annual basis.
Where the Chairman is a non-executive Chairman, they will receive a
single fee encompassing all duties. Where the Company has an Executive
Chairman, they may be eligible for additional elements in line with the
executive director policy table.
Non-executive directors receive a basic fee and may also receive
additional fees for Committee or other board duties.
Fees are payable in cash, although the Company may retain the right to
make payment in shares.
Expenses reasonably incurred in the performance of the role may be
reimbursed or paid for directly by the Company, as appropriate, including
any tax due on the benefits.
A non-executive Chairman and non-executive directors do not participate
in any of the Group’s bonus arrangements, share plans or pension
schemes.
While there is no maximum fee
level, fees are set considering:
– market practice for
comparative roles;
– the time commitment and
duties involved; and
– the requirement to attract and
retain thequality of individuals
required by theCompany.
Remuneration Policy continued
Financial Statements
Braemar Plc Annual Report and Accounts 2024
71
Strategic Report Governance
Service contracts and letters of appointment
The policy for executive directors is for them to have rolling service contracts that provide for a notice period by either party.
The notice period may range between six and twelve months. The Company may terminate the executive director’s contract by
making a payment in lieu of notice of the unexpired notice period equivalent to a value comprising salary, pension and contractual
benefits. There is no provision in any of the service contracts of the executive directors for any ex-gratia payments.
A non-executive Chairman and non-executive directors are appointed pursuant to a letter of appointment. The policy is that non-
executive directors are appointed for an initial term of three years which may be extended for further three-year periods on the
recommendation of the Nomination Committee and with the board’s agreement, subject to annual re-election at the AGM. The
non-executive directors’ letters of appointment are to be terminable on one month’s notice from either party.
Appointment date Notice period
Executive
Grant Foley 1 August 2023 6 months
James Gundy 10 November 2020 6 months
Tris Simmonds 21 July 2021 6 months
Non-executive
Elizabeth Gooch 21 July 2021 1 month
Joanne Lake 1 March 2022 1 month
Nigel Payne 6 April 2021 1 month
Cat Valentine 16 May 2023 1 month
Braemar Plc Annual Report and Accounts 2024
72
Implementation of the Policy for FY25
This part of the Report sets out details of how the Remuneration Committee intends to apply the Directors’ Remuneration Policy
(the “Policy”) to the current executive directors in FY25.
Base salary
The base salaries for the current executive directors are shown below.
FY24
£’000
FY25
£’000 Change
James Gundy 475 475 0%
Tris Simmonds 375 375 0%
Grant Foley 325 325 0%
Benefits and pension
James Gundy, Grant Foley and Tris Simmonds receive benefits and pension in line with the Policy.
Annual bonus
In line with the Policy, as James Gundy and Tris Simmonds continue to undertake broking activities, they continue to be eligible to
participate in the brokers’ bonus arrangements. This bonus is non-contractual and is based on profits generated through broking
activities as described in the Policy.
The annual bonus for Tris Simmonds will additionally have an element subject to the attainment of non-financial metrics,
depending on the needs of the business which can reflect the Group’s strategy and operational objectives for the year, including
driving efficiencies and growth across the Group.
The annual bonus for Grant Foley is based on a combination of performance measures linked to Group financial performance and
the achievement of the Group’s strategy and operational objectives for the year.
A portion of the annual bonus awarded to the CEO, CFO and COO will be deferred into shares under the Deferred Bonus Plan, and
the deferral level will be at 10% of bonus outcome.
The board believes annual bonus targets to be commercially sensitive and, consequently, does not publish details of them on a
prospective basis. However, it will consider a fuller disclosure on a retrospective basis when it reports on the performance against
them in the following year’s Annual Report.
LTIP
The Committee proposes to grant LTIP awards to our executive directors for FY25 at normal policy levels of 100% of salary. All
awards will take the form of nil cost options to acquire ordinary shares of 10 pence each in the Company following a three-year
vesting period, subject to meeting the performance criteria set by the Committee and the rules of the LTIP. More detail on the
performance metrics and targets will be disclosed in the related announcement when the awards are made. Any vested awards
will be subject to a further two-year holding period.
Chairman and non-executive director fees
During the year, the non-executive director (“NED”) base fees were reviewed and increased by £2,500 to £52,500 with effect from
March 2024.
A summary of NED fees is set out in the table below.
FY24
£’000
FY25
£’000
Chairman fee 135 135
Non-executive director base fee 50 52.5
Audit & Risk Committee Chair fee 10 10
Remuneration Committee Chair fee 10 10
Committee membership fee
1
5 5
1 Cat Valentine receives an additional fee of £5,000 for her membership on the Remuneration and Audit & Risk Committees.
Annual Report on Remuneration
Financial Statements
Braemar Plc Annual Report and Accounts 2024
73
Strategic Report Governance
Implementation of the Policy in FY24
This section sets out details of the remuneration outcomes in respect of the year ended 29 February 2024. Those sections that
have been audited have been identified below.
Single total figure of remuneration for FY24 (audited)
The remuneration of the executive directors in respect of FY24 is shown in the table below (with the prior year comparative).
James Gundy Nicholas Stone Tris Simmonds Grant Foley
FY24
£’000
FY23
£’000
FY24
£’000
FY23
£’000
FY24
£’000
FY23
£’000
FY24
£’000
FY23
£’000
Base salary 475.0 450.0 104.2 250.0 375.0 333.3 189.6 0.0
Benefits
1
2.7 2.6 1.9 1.6 3.2 2.7 1.8 0.0
Pension
2
23.8 22.9 5.2 12.5 37.5 16.7 19.0 0.0
Annual bonus
3
2,350.0 2,950.0 0.0 0.0 1,125.0 1,250.0 189.0 0.0
LTIP
4
0.0 678.1 0.0 484.4 0.0 0.0 0.0 0.0
SAYE
5
0.0 7.9 0.0 4.6 0.0 0.0 0.0 0.0
Buy out award
6
0.0 0.0 0.0 0.0 0.0 0.0 136.0 0.0
Loss of office
7
0.0 0.0 182.9 0.0 0.0 0.0 0.0 0.0
Total 2,851.5 4,111.5 294.2 753.1 1,540.7 1,602.7 535.3 0.0
Total fixed 501.5 475.5 111.3 264.1 415.7 352.7 208.6 0.0
Total variable 2,350.0 3,636.0 182.9 489.0 1,125.0 1,250.0 325.0 0.0
1 Benefits include private healthcare.
2 Pension includes the value of pension contributions to the Company’s defined contribution scheme (or an equivalent cash allowance) in respect of the
relevant year.
3 Annual bonus represents the full value of the annual bonus awarded in respect of the relevant financial year, including the portion that is deferred into shares
pursuant to the DBP.
4 LTIP represents the value of the LTIP award that vests in respect of a performance period ending in the relevant financial year.
5 SAYE represents the gain on the exercise of shares purchased through the Save As You Earn scheme.
6 Grant Foley received a cash payment of £136,000 which was a buy-out of the discounted value of his incentives from his previous employer, ClearScore, that
were forfeited on his departure to join the Company.
7 Nicholas Stone received a cash payment in lieu of notice of £131,250 (which included payment for basic salary and pension contribution entitlement) and a
payment of £51,630.50 in lieu of 36,653 vested 2019 LTIP awards.
The fees of the non-executive directors are shown in the table below.
Fixed fee
FY24
£’000
FY23
£’000
Elizabeth Gooch 60 60
Nigel Payne 135 108
Joanne Lake 60 60
Cat Valentine
1
50 –
1 Cat Valentine joined the board on 16 May 2023.
Payments to past directors and payments for loss of office (audited)
There were no payments to past directors in the year. The amounts shown in the single figure table for Nicholas Stone represents
fixed pay elements paid in FY24 prior to him stepping down from the board on 31 July 2023. Details of the leaving arrangements
for Nicholas Stone were set out on page 80 in our Directors’ Remuneration Report for FY23, but an error was made in one of the
figures disclosed. The payment in lieu of notice was incorrectly reported as being a total of £51,630.50; the correct value was
£131,250 (which included payment for basic salary and pension contribution entitlement). The rest of the disclosure regarding the
remuneration arrangements for Nicholas Stone (including the values shown in the single figure table in this year’s report) is correct.
Nicholas Stone left the Company on 31 July 2023.
Braemar Plc Annual Report and Accounts 2024
74
Buy-out award made to Group Chief Financial Officer (audited)
As part of the recruitment of our new Group Chief Financial Officer, Grant Foley, it was agreed that following successful completion
of his first year-end reporting process, a cash payment of £136,000 would be made to him to ‘buy-out’ incentives from his former
employer, ClearScore, that lapsed on his departure to join Braemar.
The cash payment made to Grant represents the estimated carrying value of the incentives at the time of his leaving ClearScore,
and after a further material discount was applied to reflect that the forfeited incentives remained subject to further performance
and service.
In order to provide certainty for all parties and cap the costs associated with Grant’s recruitment, the Remuneration Committee
agreed that the payment would be made as a one-off cash payment.
Annual bonus for FY24 (audited)
The following bonus payments have been provided for:
– James continues to participate in the brokers’ bonus, which delivered an outturn of £2.35 million from another successful
year. This represented a percentage of profits derived from personal broking revenues and a percentage of other revenues
generated across the business based on his involvement and leadership across all desks. The relevant revenues were then
reduced for agreed costs and an agreed profit share percentage was applied.
– Tris’ annual bonus delivered an outturn of £1.125 million from another successful year. The bonus outturn was determined with
reference to the successful acquisitions made during the prior year and revenues of the broking desks across the Group, with
a portion of this revenue allocated to Tris for the purposes of bonus calculation. An agreed profit share percentage was then
applied to this calculation.
– Grant’s bonus delivered an outturn of £189,000. The Committee considered both the Group’s financial performance of
the year, the achievement of the Group’s strategy and the significant improvements in the Finance function since Grant’s
appointment, and considered it appropriate to award the maximum bonus of 100% of FY24 salary (pro-rata from his start
date of 1 August 2023).
LTIP award – granted during FY24 (audited)
The Committee granted LTIP awards to James Gundy, Tris Simmonds and Grant Foley during the period at a level of 100% of
salary (on a pro-rata basis for Grant Foley). The awards have performance criteria based on the Company’s growth in Earnings per
Share (“EPS”), measured over a three-year performance period ending on 28 February 2026. The underlying EPS measure will be
adjusted to eliminate 50% of the estimated impact of changes in foreign exchange rates over the performance period.
The performance targets require a three-year CAGR growth of 25% or more for full vesting (100% of the award), with threshold
vesting (25% vesting of the award) at 15% CAGR. For attaining three-year growth between these points, vesting will be prorated on
a straight-line basis.
Shareholding guidelines and share interests (audited)
Under the shareholding guidelines, executive directors are required to build and retain a shareholding in the Group at least
equivalent to 100% of their base salary.
Non-executive directors are not subject to a shareholding guideline. The following table sets out the shareholdings (including by
connected persons) of the directors in the Company as at 29 February 2024. This shows that James Gundy and Tris Simmonds
have met the shareholding guideline. Grant Foley’s shareholding reflects that he joined the Company on 1 August 2023.
Number
of shares
beneficially
held at
29 February
2024
Shareholding
as a % of
salary
1
Guideline
met
Executive directors
James Gundy 772,165 454% Yes
Grant Foley – – No
Tris Simmonds 320,080 238% Yes
Non-executive directors
Nigel Payne 8,258
Elizabeth Gooch –
Joanne Lake 3,885
Cat Valentine –
1 Shareholding as a percentage of salary is calculated using the base salary/fee and the average share price for the last three months of the year
to 29 February 2024.
Annual Report on Remuneration continued
Financial Statements
Braemar Plc Annual Report and Accounts 2024
75
Strategic Report Governance
The table below provides details of the interests of the executive directors in incentive awards during the year.
Awards
held at
1 Mar
2023 Grant date
Share
price on
grant
£
1
Granted
Exercised/
released Lapsed
Awards
held at
29 Feb
2024
Exercise
price
£
Exercisable
from
Exercisable
to
James Gundy
2018 LTIP 33,294 29 Oct 18 2.30 – – – 33,294 – 26 May 23 29 Oct 28
2019 LTIP 166,200 1 Jul 19 1.855 – – – 166,200 – 1 Jul 24 1 Jul 29
2020 DBP 386,195 9 Jul 20 1.21 – 372,423 13,772
2
– 1.22 9 Jul 23 9 Jul 23
2020 LTIP 218,750 24 Jul 20 1.23 – – – 218,750 – 24 Jul 25 24 Jul 30
2021 DBP 169,925 8 Jun 21 2.66 – – – 169,925 2.66 8 Jun 24 8 Jun 24
2021 LTIP 300,884 14 Jun 21 2.91 – – – 300,884 – 14 Jun 26 14 Jun 31
2023 LTIP 164,360 16 Feb 23 3.14 – – – 164,360 – 16 Feb 26 16 Feb 33
2023 DBP 66,484 16 Feb 23 3.14 – – – 66,484 – 30 Jun 25 16 Feb 33
2024 LTIP – 8 Dec 23 2.81 169,039 – – 169,039 – 8 Dec 26 8 Dec 33
2024 DBP – 8 Dec 23 2.81 104,982 – – 104,982 – 9 Jul 26 8 Dec 33
Nicholas Stone
3
2019 LTIP 36,653 1 Jul 19 1.855 – – 36,653 – – 1 Jul 24 1 Jul 29
2020 DBP 28,245 9 Jul 20 1.21 – – 28,245 – 1.22 9 Jul 23 9 Jul 23
2020 LTIP 156,250 24 Jul 20 1.23 – – 156,250 – – 24 Jul 25 24 Jul 30
2021 DBP 25,398 8 Jun 21 2.66 – – 25,398 – 2.66 8 Jun 24 8 Jun 24
2021 LTIP 88,495 14 Jun 21 2.91 – – 88,495 – – 14 Jun 26 14 Jun 31
2023 DBP 1,537 16 Feb 23 3.14 – – 1,537 –
Tris Simmonds
2020 DBP 34,511 9 Jul 20 1.22 – 34,511 – – – 9 Jul 23 9 Jul 23
2021 DBP 26,315 8 Jun 21 2.66 – – – 26,315 – 8 Jun 24 8 Jun 24
2023 LTIP 259,516 16 Feb 23 3.14 – – – 259,516 – 15 Feb 26 16 Feb 33
2023 DBP 14,505 16 Feb 23 3.14 – – – 14,505 3.18
4
30 Jun 25 16 Feb 33
2023 LTIP – 8 Dec 23 2.81 133,452 – – 133,452 – 8 Dec 26 8 Dec 33
2023 DBP – 8 Dec 23 2.81 44,484 – – 44,484 – 9 Jul 26 8 Dec 33
Grant Foley
2023 LTIP – 8 Dec 23 2.81 67,467 – – 67,467 – 8 Dec 26 8 Dec 33
1 Share price included is the market price on the date of grant. When calculating the number of awards to be made, the Company uses the middle market
quotations for the three trading days prior to grant.
2 The 2020 DBP award was granted with a corresponding option under the Company Share Option Plan (“CSOP”). On exercise, 13,772 shares lapsed in respect
of the DBP/CSOP award to take account of the gain in value on exercise of the CSOP options.
3 Details of Nicholas Stone’s leaving arrangements and the impact on his share awards are set out on page 80 of the 2023 Annual Report.
4 Tris Simmonds was also given corresponding options under the Company Share Option Plan (“CSOP”) over 3,412 shares, which will vest on the same date as
the 2023 DBP award. The number of shares in respect of which the DBP award will vest will be reduced to take account of any gain in value, as at exercise, of
the CSOP options.
Braemar Plc Annual Report and Accounts 2024
76
The performance conditions attached to the outstanding LTIP awards are as follows:
– 2021 LTIP: The 2021 LTIP awards had performance criteria based on the Company’s growth in absolute TSR measured over a
three-year performance period ending on 13 June 2024, as follows: the maximum possible opportunity will vest if growth in TSR
is equivalent to a CAGR of 22% or more per annum over the three-year performance period; if CAGR over the performance
period is less than 12% per annum, none of the awards will vest; if CAGR is 12% per annum, 25% of the award will vest; and if
CAGR is between 12% and 22% per annum, the vesting outcome will be calculated on a straight-line basis between 25%
and 100%. At the time of this report, the performance period for the 2021 LTIP awards is not yet complete and the vesting
outcome of these awards will be reported in the FY25 Annual Report.
– 2023 LTIP: The 2023 LTIP awards had performance criteria based on the Company’s growth in EPS measured over a three-
year performance period ending on 28 February 2025 as follows: the maximum possible opportunity will vest if growth in EPS is
equivalent to a CAGR of 25% or more per annum over the three-year performance period; if CAGR over the performance period
is less than 15% per annum, none of the awards will vest; if CAGR is 15% per annum, 25% of the award will vest; and if CAGR is
between 15% and 25% per annum, the vesting outcome will be calculated on a straight-line basis between 25% and 100%.
– 2024 LTIP: The 2024 LTIP awards had performance criteria based on the Company’s growth in EPS measured over a three-
year performance period ending on 28 February 2026 as follows: the maximum possible opportunity will vest if growth in EPS is
equivalent to a CAGR of 25% or more per annum over the three-year performance period; if CAGR over the performance period
is less than 15% per annum, none of the awards will vest; if CAGR is 15% per annum, 25% of the award will vest; and if CAGR is
between 15% and 25% per annum, the vesting outcome will be calculated on a straight-line basis between 25% and 100%.
Percentage change in remuneration of the directors compared with average UK employees
The following table shows the year-on-year percentage change in the salary, benefits and annual bonus of the directors and
the employees of the Company for FY24 (and previous financial years from FY21). The Company considers that the Group’s UK
employees is the more representative comparator group, as the majority of the Group’s employees are not employed by the
Company itself, and as the Group Chief Executive Officer and the majority of the Group’s workforce are UK-based.
% Change in base salary % Change in benefits % Change in annual bonus
FY23
to FY24
FY22
to FY23
FY21
toFY22
FY23
to FY24
FY22
to FY23
FY21
to FY22
FY23
to FY24
FY22
to FY23
FY21
to FY22
All UK employees 6% 12% 6% 7% 49% 0% -30% 104% 13%
All Plc employees 9% 7% 10% 7% 13% -20% -9% 66% 119%
Executive directors
James Gundy
1
6% 6% N/A 4% 0% N/A -10% 51% N/A
Tris Simmonds
2
12.5% 50% N/A 19% 0% N/A -10% 194% N/A
Grant Foley
3
Non-executive directors
Joanne Lake
4
0% N/A N/A N/A N/A N/A N/A N/A N/A
Nigel Payne
5
25% 0% N/A N/A N/A N/A N/A N/A N/A
Elizabeth Gooch
6
0% 18% N/A N/A N/A N/A N/A N/A N/A
Cat Valentine
7
N/A N/A N/A N/A N/A N/A N/A N/A N/A
1 James Gundy joined the board on 1 January 2021, so there is no prior year comparison in respect of FY20 and FY21.
2 Tris Simmonds joined the board on 1 August 2021, so there is no prior year comparison.
3 Grant Foley joined the board on 1 August 2023, so there is no prior year comparison.
4 Joanne Lake joined the board on 1 March 2022, so there is no prior year comparison.
5 Nigel Payne joined the board on 1 May 2021, so there is no prior year comparison.
6 Elizabeth Gooch joined the board on 1 August 2021, so there is no prior year comparison.
7 Cat Valentine joined the board on 16 May 2023, so there is no prior year comparison.
Annual Report on Remuneration continued
Financial Statements
Braemar Plc Annual Report and Accounts 2024
77
Strategic Report Governance
CEO pay ratio
The table below shows how the Group Chief Executive Officer’s single-figure remuneration for FY23 compares to the equivalent
single-figure remuneration for the Group’s UK employees ranked at the 25th, 50th and 75th percentile.
Year Method
25th
percentile
pay ratio
Median
pay ratio
75th
percentile
pay ratio
2024 Option A 57:1 30:1 15:1
2023 Option A 74:1 40:1 18:1
2022 Option A 80:1 54:1 21:1
2021 Option A 21:1 13:1 5:1
2024
25th
percentile
pay
£
Median
pay
£
75th
percentile
pay
£
Total pay and benefits 50,000 95,477 188,106
Salary element of total pay and benefits 45,000 80,000 125,000
The Company has again selected Option A as the method for calculating the CEO pay ratio. Option A calculates a single figure
for every UK-based employee in the year to 29 February 2024 and identifies the employees that fall at the 25th, 50th and 75th
percentiles. This method was chosen as it is considered the most accurate way of identifying the relevant employees and aligns
to how the single figure table is calculated.
The Company has included the following elements of pay in its calculation: annual basic salary, allowances, bonuses, share
awards, employer’s pension contributions, and P11D benefits. These pay elements were separated into recurring and non-recurring
components. The recurring components were scaled relative to the proportion of the financial year worked by each individual
employee before being added to the non-recurring elements such as bonus and share awards.
This resulted in a single figure for each employee, from which the individuals at the 25th, 50th and 75th percentiles could be
identified.
Relative importance of spend on pay
The chart below shows total employee remuneration and distributions to shareholders paid in respect of FY24 and FY23 (and the
difference between the two).
FY24
£ million
FY23
£ million
Change
(%)
Total employee remuneration 97.4 98.3 -0.9%
Distributions to shareholders 4.2 3.6 +16%
Braemar Plc Annual Report and Accounts 2024
78
Performance graph and table
The chart below shows the Total Shareholder Return of the Company against the FTSE All-Share Index over the last ten years.
The Committee believes the FTSE All-Share Index is the most appropriate index against which the Total Shareholder Return of the
Company should be measured.
0
50
100
150
200
Feb 2024Feb 2023Feb 2022Feb 2021Feb 2020Feb 2019Feb 2018Feb 2017Feb 2016Feb 2015Feb 2014
Indexed Total Return
Braemar Plc FTSE All-Share
Source: Datastream (an LSEG product).
The table below provides remuneration data for the role of the CEO for the current and each of the last ten financial years over the
equivalent period.
CEO
FY24
James
Gundy
£’000
FY23
James
Gundy
£’000
FY22
James
Gundy
£’000
FY21
Ronald
Series/
James
Gundy
£’000
FY20
James
Kidwell/
Ronald
Series
£’000
FY19
James
Kidwell
£’000
FY18
James
Kidwell
£’000
FY17
James
Kidwell
£’000
FY16
James
Kidwell
£’000
FY15
James
Kidwell
£’000
Single total figure of remuneration 2,851.5 4,112 2,830 714 324 404 579 404 577 549
Annual bonus (% of maximum) N/A 74% 49% 34% 10% 0% 50% 0% 60% 55%
LTIP vesting (% of maximum) N/A 100% 90% 18% 0% 0% 0% 0% N/A 0%
Statement of voting at AGM
The following table sets out the votes cast (including those cast by proxy) at the 2023 AGM in respect of the Committee’s Report
for the year ending 28 February 2023 and the Directors’ Remuneration Policy.
Votes for Votes against
Total votes
cast
Votes
withheldResolution # % # %
Approval of Directors’ Remuneration Report for
year ending 28 February 2023 7,297,5 3 6 57.7 5 5,339,764 42.25 12,637,300 9,088
Approval of Directors’ Remuneration Policy 7,283,255 5 7.65 5,350,295 42.35 12,633,550 12,838
Elizabeth Gooch
On behalf of the Remuneration Committee
22 May 2024
Annual Report on Remuneration continued
Directors’ Report
for the year ended 29 February 2024
Financial Statements
Braemar Plc Annual Report and Accounts 2024
79
Strategic Report Governance
Rebecca-Joy Wekwete
Company Secretary
Since my appointment in January 2023, I
have enjoyed supporting such a collegiate
board throughout a busy year. I look forward
to working closely with the board as we
continue to execute our growth strategy.
This section contains additional information that the directors
are required to include within the Annual Report. Together
with the Strategic Report on pages 1 to 49, it forms the
Management Report for the purposes of DTR 4.1.5R. Other
information that is relevant to this Directors’ Report, and which
is incorporated by reference into this Directors’ Report, can be
found elsewhere in this Annual Report, as follows:
– Results and decisions relating to dividends on page 6.
– Important events during the year ended 29 February 2024
and likely future developments in the business of the
Company or its subsidiaries on pages 5 to 7 and 12 to 13.
– Going concern on pages 27 and 48.
– Greenhouse gas emissions on page 34.
– Employee engagement and diversity on page 39.
– Engagement with clients and other key stakeholders
on pages 28 to 29 and 53.
– Corporate Governance Report on pages 50 to 78.
– Section 172 Statement on pages 28 to 29.
– Risk and compliance framework review on pages 43 to 49.
– Principal decisions taken during the year on pages 28 to 29.
– EPSG Report on pages 30 to 41.
– Non-Financial Information Statement on page 42.
Principal activity
Braemar Plc (the “Company”, registered number 02286034) is
the ultimate holding company for the Group, a global provider
of expert investment, chartering, and risk management advice
to the shipping and energy markets.
Review of the business
A more detailed review of the business for the year is included
in the Chairman’s Statement, the Group Chief Executive
Officer’s Statement and the Financial Review.
Amendment of Articles of Association
The Company’s shareholders may amend the Company’s
Articles of Association by special resolution.
Branches outside the United Kingdom
The Group has branches and/or representative offices in
Australia, China, Germany, Greece, India, Spain, Singapore,
Switzerland, United Arab Emirates, and the USA.
Change of control – significant agreements
No person holds securities in the Company carrying special
rights with regard to control of the Company. The Company is
not aware of any agreements between holders of securities
that may result in restrictions in the transfer of securities or
voting rights.
The Convertible Loan Notes that are summarised below carry
certain accelerated conversion rights in the event of default
on financial commitments associated with the instruments
or business distress within the Group. The Convertible Loan
Notes shall automatically convert or be redeemed in the event
that any person or persons acting in concert holds more than
50% of the issued share capital of the Group or an impairment
charge in excess of €50 million is reflected in the audited
Financial Statements of the Group.
There are a number of ordinary course of business agreements
that take effect, alter or terminate following a change of control
of the Company, but none of these are considered to have a
significant potential impact on the business of the Group as
awhole.
Convertible Loan Note instruments
On 26 September 2017, the Company completed the
acquisition of Braemar Naves. A new class of convertible loan
note instruments (the “Convertible Loan Notes”) formed a core
part of the consideration for this transaction. The Company
has issued all of the Convertible Loan Notes to be issued in
connection with this acquisition, of which €3,627,956 worth
remain outstanding.
These Convertible Loan Notes are unsecured and unlisted.
The Convertible Loan Notes are denominated in euros and,
aspart of the restructuring, it was agreed that they would
carry a 5% per annum coupon from September 2025,
increasing from 3%. The conversion prices were fixed at
390.3 pence for management note holders and 450.3 pence
for non-management note holders. For more information
on the Convertible Loan Notes, please see Note 4.7 to the
FinancialStatements.
Political contributions
There were no political contributions during the year ended
29February 2024 (FY23: £nil).
Share capital and voting rights
As at 29 February 2024, the Company’s total issued ordinary
share capital was 32,924,877 shares of 10 pence each
(28February 2023: 32,924,877 shares). All of the Company’s
shares are fully paid up and quoted on the London Stock
Exchange plc’s Official List. The rights and obligations attaching
to the Company’s ordinary shares (as well as the powers
of the Company’s directors and any rules relating to their
appointment and replacement) are set out in the Company’s
Articles of Association, copies of which can be found online
at Companies House, or by writing to the Company Secretary.
There are no restrictions on the voting rights or the transfer
restrictions attaching to the Company’s issued ordinary shares.
Braemar Plc Annual Report and Accounts 2024
80
Directors’ Report continued
At the AGM held on 9 August 2023, shareholders passed a
resolution to renew the directors’ authority to allot shares in the
Company. Further details are provided in the Notice of theAGM.
Share schemes
Details of long-term incentive schemes are provided in the
Directors’ Remuneration Report on page 68.
Purchase of own ordinary shares
The Company is authorised to make market purchases of the
Company’s ordinary shares pursuant to the authority granted
by its shareholders at the AGM held on 9 August 2023. This
authority will expire at the end of the 2024 AGM. The Company
did not use this authority in either the year ended 28 February
2023 or the year ended 29 February 2024.
The directors proposed that this authority be renewed at the
2023 AGM in accordance with the Company’s Articles of
Association and this resolution was passed. In accordance with
the ABI Investor Protection Guidelines, the maximum number
of ordinary shares which may be acquired under such authority
is 10% of the Company’s issued ordinary shares. The directors
will only make a purchase of shares using this authority if it is
expected to result in an increase in earnings per share and
will take into account other available investment opportunities,
appropriate gearing levels and the overall position of the
Company. Any shares purchased in accordance with this
authority will subsequently be cancelled.
Options and ESOP Trust
The total number of options to subscribe for shares in the
Company that were outstanding as at 29 February 2024 was
1,809,934, being 5.4% of the issued share capital.
During the year ended 29 February 2024, 2,156,196 of the
Company’s ordinary shares were purchased by SG Kleinwort
Hambros Trust Company (CI) Ltd, as Trustee of the Company’s
ESOP Trust (2023: 2,795,000). The Trustee had absolute
discretion and independence in respect of any trading
decisions it made in respect of these purchases. As at
29 February 2024, the ESOP held 2,303,211 shares.
Directors and their interests
The directors of the Company as at the date of this Directors’
Report are shown on pages 54 to 55. Nicholas Stone served as
a director of the Company during the year ended 29February
2024 and until 31 July 2023.
The directors’ beneficial interests in the ordinary shares and
share options of the Company as at 29 February 2024 are
disclosed in the Directors’ Remuneration Report on page 74.
There have not been any changes in such interests between
29 February 2024 and 1 May 2024.
As at 29 February 2024, the executive directors, in common
with other employees of the Group, also have an interest in
2,365,501 (2023: 3,579,630) ordinary 10 pence shares held by
SG Kleinwort Hambros Trust Company (CI) Ltd on behalf of the
Employee Share Ownership Plan and in 62,290 (2023: 62,290)
ordinary 10 pence shares held by Computershare Trustees
(Jersey) Limited on behalf of the ACM Shipping Limited
Employee Trust.
The directors held no material interest in any contract of
significance entered into by the Company or its subsidiaries
during the year ended 29 February 2024.
During the year, the Company maintained cover for its directors
and officers and those of its subsidiary companies under a
directors’ and officers’ liability insurance policy, as permitted by
the Companies Act 2006.
Significant shareholdings
As at 29 February 2024, the Company was aware of
approximately 20.5% of its ordinary shares being held by
Group employees and the ESOP Trust. The working vendors
of Braemar Naves Corporate Finance GmbH currently hold
€3,627,956’s worth of Convertible Loan Notes.
As at 29 February 2024, the Company was aware of the
following significant direct or indirect shareholdings of 3%
ormore:
Name
Number of
shares
Percentage
of issued
ordinary
share capital
1
Hargreaves Lansdown Asset
Management 2,901,091 8.81%
SG Kleinwort Hambros Trust
Company (CI) Limited as Trustee
ofthe Braemar Plc ESOP 2,365,501 7.18%
Interactive Investor 2,311,322 7.0 2%
Quentin Soanes 1,238,990 3.76%
Barclays Wealth 1,237,079 3.76%
Halifax Share Dealing 1,028,730 3.12%
Lightship SA 1,000,000 3.04%
1 Percentages are shown as a percentage of the Company’s total voting
rights as at 29 February 2024.
Financial instruments
The Group’s financial risk management objectives and policies
are set out in the Corporate Governance Report on pages 53,
56 to 60 and in the Strategic Report on pages 43 to 49.
Statement of directors’ responsibilities
The directors are responsible for preparing this Annual
Report and the Group and Company Financial Statements in
accordance with applicable laws and regulations.
Company law requires the directors to prepare Group and
Company Financial Statements for each financial year. Under
such law, they are required to prepare the Group Financial
Statements in accordance with international accounting
standards in conformity with the Companies Act 2006. Under
the Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules, Group Financial Statements are required
to be prepared in accordance with UK adopted IAS and the
requirements of the Companies Act 2006.
Under company law, the directors must not approve the Group
Financial Statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
the Company and of the profit or loss of the Group and the
Company for that period.
In preparing these Financial Statements, the directors are
required to:
– select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors and then apply them consistently;
– make judgements and accounting estimates that are
reasonable and prudent;
Financial Statements
Braemar Plc Annual Report and Accounts 2024
81
Strategic Report Governance
– present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
– provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the Group’s financial position and
financial performance;
– in respect of the Group Financial Statements, state whether
UK adopted IAS and the requirements of the Companies Act
2006 have been followed, subject to any material departures
disclosed and explained in the Financial Statements;
– in respect of the Parent Company Financial Statements,
state whether UK Generally Accepted Accounting Practice
and in conformity with the Companies Act have been
followed, subject to any material departures disclosed and
explained in the Financial Statements; and
– prepare the Group and Parent Company Financial
Statements on the going concern basis unless it is
appropriate to presume that the Company and the Group
will not continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
and Group’s transactions and disclose with reasonable
accuracy the financial position of the Company and the
Group and enable them to ensure that the Company and
the Group Financial Statements comply with Section 403
of the Companies Act 2006. They are responsible for such
internal controls as they determine is necessary to enable the
preparation of Financial Statements that are free from material
misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and corporate governance
statement that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Responsibility statement of the directors in respect
ofthe Annual Report
Each of the directors, whose details can be found on pages 54
to 55, to the best of their knowledge confirm that the:
– consolidated Financial Statements, prepared in accordance
with UK adopted IAS and the requirements of the Companies
Act 2006, give a true and fair view of the assets, liabilities,
financial position and profit of the Parent Company and
undertakings included in the consolidation taken as a whole;
– Annual Report, including the Strategic Report and the
Directors’ Report, together includes a fair review of the
development and performance of the business and the
position of the Company and undertakings included in the
consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face; and
– Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position
and performance, business model and strategy.
Disclosure of information to the auditors
In accordance with Section 418 of the Companies Act 2006,
each person who is a director at the date of approval of this
Annual Report confirms that:
– so far as the director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
– the director has taken all the steps that they ought to
have taken as a director to make themselves aware of
any relevant audit information and to establish that the
Company’s auditor is aware of that information.
Forward-looking statements
Where this Annual Report contains forward-looking statements,
these are based on current expectations and assumptions
and only relate to the date on which they are made. These
statements 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 Annual
Report, could cause actual results to differ materially from
those expressed or implied in any forward-looking statement.
Such factors include, but are not limited to, those discussed on
pages 43 to 49 of this Annual Report.
Forward-looking statements in this Annual Report include
statements regarding the intentions, beliefs or current
expectations of our directors, officers and employees
concerning, among other things, the Group’s results, financial
condition, liquidity, prospects, growth, strategies and the
business. 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 Annual Report 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.
Appointment of the auditors
In accordance with Section 489 of the Companies Act 2006,
a resolution for the reappointment of BDO LLP as auditor of
the Company was proposed and passed at the AGM held on
9August 2023.
Annual General Meeting
The 2024 AGM of the Company will be held on Wednesday
3July 2024 at 10 a.m. at the Company’s offices at One Strand,
Trafalgar Square, London, WC2N 5HR.
By order of the board
Rebecca-Joy Wekwete
Company Secretary
22 May 2024
This Directors’ Report was approved by the board of directors
on 22 May 2024.
Signed on behalf of the board of directors by:
Grant Foley James Gundy
Group Chief Financial Officer Group Chief Executive Officer
22 May 2024 22 May 2024
Braemar Plc Annual Report and Accounts 2024
82
Independent auditor’s report
to the members of Braemar Plc
Opinion on the financial statements
In our opinion:
– the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 29
February 2024 and of the Group’s profit for the year then ended;
– the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
– the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Braemar Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year
ended 29 February 2024 which comprise:
Composition Financial reporting framework
Group • Consolidated Income Statement
• Consolidated Statement of Comprehensive Income
• Consolidated Balance Sheet
• Consolidated Cash Flow Statement
• Consolidated Statement of Changes in Total Equity
• Notes to the financial statements, including a
summary of material accounting policies.
Applicable law and UK adopted international
accounting standards.
Parent Company • Company Balance Sheet
• Company Statement of Changes in Total Equity
• Notes to the financial statements, including a
summary of material accounting policies.
Applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard
101 Reduced Disclosure Framework (United Kingdom
Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion. Our audit opinion is consistent with the additional report to the Audit and Risk committee.
Independence
Following the recommendation of the Audit and Risk committee, we were appointed by the Board of Directors on 2 October
2018 to audit the financial statements for the year ended 28 February 2019 and subsequent financial periods. The period of total
uninterrupted engagement is six years, covering the years ended 28 February 2019 to 29 February 2024. We remain independent
of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not
provided to the Group or the Parent Company.
The lead audit partner at BDO LLP responsible for the external audit is Oliver Chinneck. Oliver was a key audit partner in respect
of the audits for the years ending 2019-2022 in his capacity as audit partner for certain Group subsidiary companies. He took over
as Group audit partner in 2023. In line with the independence requirements Oliver should have rotated after the 2023 year end
audit having served five years as a key audit partner. However, following the matters which arose in the 2023 year-end audit and
the change in Group Chief Financial Officer, to maintain audit quality, the Audit & Risk Committee wrote to BDO’s ethics partner to
request that Oliver’s tenure as lead audit partner be extended by a year. Following review, a one-year extension for the 2024 audit
was agreed with additional safeguards to maintain Independence. A new audit partner has been appointed for the FY25 year end
audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
– Evaluating the Directors’ going concern assessment and forecasts, including assessing the underlying base case cash flow
forecasts by obtaining supporting documents, including current forward order book and considering other impacts such as:
– geo-political conflicts;
– the overall shipping industry;
– current economic matters; and
– climate-change;
– Evaluating the stress tests performed by the Directors, to determine whether they are appropriate based on our knowledge of
the business and industry and whether further stress tests should be performed;
– Reviewing the reverse stress test forecast to assess the point at which covenants would be breached or a liquidity event
triggered;
Braemar Plc Annual Report and Accounts 2024
83
Strategic Report Governance Financial Statements
– Considering the Directors’ conclusion that the likelihood of the reverse stress case scenario materialising is remote and the
ability of the Directors to undertake further mitigating actions that are within their control should this be required;
– Assessing the Group’s covenant compliance calculations (actual at year end and forecast post year-end) with the terms of the
facility agreement;
– Assessing the covenant waivers received from the provider of the banking facilities following the delay in approval of the prior
year financial statements; and
– Assessing the financial statement disclosures regarding going concern to determine whether they are complete and accurate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of
this report.
Overview
Coverage The coverage achieved from the full scope audits which included significant and non-significant
components was 88% (2023: 88%) of Group revenue and 88% (2023: 83%) of Group total
assets. Further specific audit procedures were undertaken on non-significant components as
required to ensure sufficient audit coverage.
Key audit matters
2024 2023
1. Shipbroking revenue recognition on Sales and Purchase (Second-
hand and New Builds)
2. Acquisition of Southport Maritime Inc
3. Impairment of goodwill in respect of the corporate finance division
(Naves) cash generating unit (“CGU”)
4. Accounting treatment of certain legacy transactions subject to
investigation
✓ ✗
✗ ✓
✗ ✓
✗ ✓
Key Audit Matter on ‘The Acquisition of Southport Maritime Inc’ and ‘Accounting treatment of
certain legacy transactions subject to investigation’ were event driven in 2023 and hence do not
apply for 2024.
Key Audit Matter on ‘Impairment of goodwill in respect of the corporate finance division (Naves)
cash generating unit (“CGU”) is no longer considered to be a key audit matter following the prior
year impairment of £9.1m.
Materiality
Group financial statements as a whole
£917,000 (2023: £901,000) 0.6% of revenue from continuing operations (2023: 5% of underlying
profit before tax)
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system
of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
We designed an audit strategy to ensure we have obtained the required audit assurance for each component for the purposes of
our Group audit opinion. Components were scoped in to address aggregation risk and to ensure sufficient coverage was obtained
of Group balances on which to base our audit opinion.
Full scope audit procedures were performed on seven components, three of these were considered significant with the other four
being undertaken to ensure appropriate audit coverage. Two of the significant components were audited by the Group audit team
with the remaining significant component being audited by BDO Singapore. The four other full scope audits were undertaken by
the Group audit team, a separate BDO UK team, BDO Germany and BDO Australia.
Braemar Plc Annual Report and Accounts 2024
84
Independent auditor’s report continued
to the members of Braemar Plc
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude
whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial statements as a
whole. Our involvement with component auditors included the following:
Significant components • We focussed our Group audit scope primarily on the audit work at three significant
components including the Parent Company, which were subject to full scope audit procedures.
• The significant components comprise 88% of Group Revenue and 88% of Group assets.
• The Group audit team audited two significant components with the Singapore component
being audited by a local BDO member firm in Singapore.
• The Group audit team issued the Group instructions, oversaw the risk assessment process and
the overall audit approach and strategy with the component auditor at the planning stage. The
Group audit team performed remote reviews of the significant component working papers.
The Group audit team attended several virtual conference meetings throughout the planning,
fieldwork and completion stages of the audit.
Other full scope audits • There were four components for which full scope audits were carried out in order to provide
additional audit coverage.
• These procedures were performed by the Group team, component team within BDO LLP and
BDO member firms in Australia and Germany. The Group audit team directed the work for the
full scope audit through the issuance of detailed instructions, briefings and performing a review
of selected working papers.
Specified audit procedures • There were three further components for which specified audit procedures were completed.
Specified audit procedures were performed to increase audit coverage and to address certain
risks in relation to revenue recognition as well as other financial statement areas. All other
balances were scoped in for analytical review procedures.
• These procedures were performed by Group audit team.
Remaining components • The remaining 28 components were scoped in for analytical review procedures to confirm
our conclusion that there were no significant risks of material misstatement in the aggregated
financial information.
• Certain financial statement areas of the 28 components were subject to unpredictability testing.
• The analytical reviews were completed by the Group audit team or BDO member firms.
Climate change
Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements
included:
– Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and their
potential impacts on the financial statements and adequately disclose climate-related risks within the annual report;
– Our own qualitative risk assessment taking into consideration the shipping sector in which the Group operates and how climate
change affects this particular sector;
– Review of the minutes of Board and Audit and Risk Committee meeting and other papers related to climate change; and
We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and
commitments have been reflected, where appropriate, in the Directors’ going concern assessment and viability assessment.
We also assessed the consistency of management’s disclosures included as ‘Statutory other Information’ within the Annual
Report (including the disclosures in the Task Force on Climate-Related Financial Disclosures (‘TCFD’) section) within the financial
statements and with our knowledge obtained from the audit. Our responsibility over other information is further described in the
Reporting on other information section of our report.
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially impacted by climate-
related risks.
Braemar Plc Annual Report and Accounts 2024
85
Strategic Report Governance Financial Statements
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How the scope of our audit addressed the key audit matter
Shipbroking revenue
recognition on Sales &
Purchase (Second-hand
and New Builds)
See note 2.1 and the
accounting policy in
note 2
Revenue includes amounts in respect of
commissions from Sales and Purchase
relating to second-hand sales and
newbuilding contracts.
The Group’s entitlement to commission
revenue is usually dependent upon the
fulfilment of certain obligations, for example
stage completion of a vessel build in broking
or when the title of the vessel passes from
the seller to the buyer for second-hand sales.
Consideration is therefore required as to
whether the parties’ obligations have been
fulfilled and the commission revenue can be
recognised.
The transactions within the sale and
purchase revenue stream, may be individually
significant in value. As such, we therefore
focused on the sales and purchase revenue
stream transactions both in-year and around
the year end, where there is a heightened risk
of manipulation, and large transactions may
be recorded in the incorrect period.
For these reasons, we considered compliance
with IFRS 15 and cut off of revenue recognition
relating to sales and purchase transactions to
be a key audit matter.
Our procedures included:
• testing a sample of revenue items recognised
during the year to third-party documentation to
confirm that performance obligations have been
fulfilled;
• testing a sample of revenue items recognised
around the year end to confirm the satisfaction of
the performance obligation to ensure revenue was
recognised in the correct period;
• testing a sample of credit notes issued to assess
whether the reason for issue of credit note was
appropriate;
• reviewing the commission rates charged during
the year to identify outliers compared to our
expectations for further testing;
• testing a sample of address commissions and
co-broker commission arrangements for accuracy
and existence of revenue;
• with the support of our specialist IT audit team
using computer assisted audit techniques to
reconcile financial information between the sales
system and general ledger; and
• testing a sample of manual revenue adjustments
posted to the general ledger to supporting
documentation.
Key observations:
From the evidence obtained we are satisfied that
revenue recognition complies with IFRS 15, and cut off
was appropriate, for sales and purchase transactions.
Braemar Plc Annual Report and Accounts 2024
86
Independent auditor’s report continued
to the members of Braemar Plc
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality
level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group Parent company
Materiality £917,000 (2023: £901,000) £810,000 (2023: £810,000)
Basis 0.6% of revenue from continuing operations
(2023: 5% of underlying profit before tax)
Based on 1% of total assets capped at 90%
(2023: 90%) of Group materiality
Rationale Materiality for the Group financial statements as
a whole was set at £917,000 (2023: £901,000)
determined with reference to a benchmark of Group
revenue of 0.6% (2023: 5% of underlying profit
before tax).
During the year, we have reconsidered the most
appropriate benchmark on which to set materiality,
and this has resulted in a change to the benchmark
and materiality amount.
We consider total Group revenue from continuing
operations to be the most appropriate benchmark
due to potential volatility in underlying profit before tax
due in part to acquisition related expenses and foreign
exchange movements.
Capped materiality at 90% (2023: 90%) of Group given
the assessment of component aggregation risk.
Further materiality measures applied in the conduct of the audit include:
Measure Application
Performance
materiality
Group: £596,000
(2023: £585,000)
Parent: £533,000
(2023: £526,000)
Performance materiality was set at 65% (2023: 65%) this was
set by the audit team with reference to the level of adjustments
identified in the prior year, level of sampling work required, the
number of accounts subject to high degrees of estimation and
judgement and the number of components.
Component
materiality
The range of materiality used
for components ranged from
£550,000 to £820,000
(2023: £430,000 to £810,000)
Our audit work at each component has been executed at levels
of materiality applicable to each individual entity based on its size
and risk as approved by the Group audit team and in each case,
lower than that applied to the Group.
We set materiality for each component of the Group based on a
percentage of between 60% and 90% (2023: 48% and 90%) of
Group materiality dependent on the size and our assessment of
the risk of material misstatement in that component. In the audit
of each component, we further applied performance materiality
levels of 65% (2023: 65%) of the component materiality to our
testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reporting threshold Group: £18,000 (2023: £18,000)
Parent: £18,000 (2023: £16,000)
All audit differences in excess of the ‘reporting threshold’ are
reported to the Audit and Risk Committee, as well as differences
below that threshold that, in our view, warranted reporting on
qualitative grounds.
Quantitative
& qualitative
disclosures
We also report to the Audit and Risk Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
Braemar Plc Annual Report and Accounts 2024
87
Strategic Report Governance Financial Statements
Other information
The Directors are responsible for the other information. The other information comprises the information included in the Annual
Report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears
to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the parent company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern
and longer-term
viability
• The Directors’ statement with regards to the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 48; and
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment
covers and why the period is appropriate set out on pages 96 to 97.
Other Code
provisions
• Directors’ statement on fair, balanced and understandable set out on pages 80 to 81;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set
out on page 45;
• The section of the annual report that describes the review of effectiveness of risk management and
internal control systems set out on page 60; and
• The section describing the work of the Audit and Risk committee set out on page 56.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report
and Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report
or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on which
we are required
to report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our
audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Braemar Plc Annual Report and Accounts 2024
88
Independent auditor’s report continued
to the members of Braemar Plc
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
– We gained an understanding of the legal and regulatory framework applicable to the Group and the industry in which it
operates, through discussion with management and the Audit and Risk Committee and our knowledge of the industry;
– We focused on significant laws and regulations that could give rise to a material misstatement in the financial statements,
including, but not limited to, the Companies Act 2006, the UK Listing Rules of the Financial Conduct Authority, UK adopted
international accounting standards for the Group and United Kingdom Generally Accepted Accounting Practice for the Parent
Company, Health and Safety legislations, the Bribery Act 2010 and tax legislations;
– We considered compliance with these laws and regulations through discussions with management, and in-house legal counsel,
reviewing internal audit reports and discussing with the Audit and Risk Committee. Our procedures also included reviewing
minutes from board meetings of those charged with governance to identify any instances of non-compliance with laws and
regulations as well as attending Audit and Risk Committee meetings;
– With the support of our internal tax specialists, we reviewed the Group’s tax computations against the requirements of the
relevant tax legislation and where applicable, reviewed correspondences with relevant taxation authorities;
– We reviewed the financial statements disclosures against the requirements of the applicable accounting framework;
– We considered the matters identified as part of the internal investigation undertaken prior to the approval of the 2023 year-end
financial statements and considered any impacts on the current year audit; and
– We reviewed documentation in relation to the Capital Reduction process that was completed to address the payment of
unlawful dividends historically, and increased the Company’s capacity to pay future dividends, as disclosed in note 6.2.
Fraud
– With the support of our forensic specialists we assessed the susceptibility of the Group’s financial statements to material
misstatement, including how fraud might occur. We considered the fraud risk areas to be management override of controls and
revenue recognition, as well as certain matters arising from the investigation;
– We performed a robust risk assessment and obtained an understanding of the design and implementation of relevant
controls surrounding the revenue recognition process for each revenue stream and the relevant controls over the financial
reporting close process (FRCP) such as controls over the posting of journals and the consolidation process and obtained an
understanding of the segregation of duties in these processes;
– In addressing the risk of fraud including management override of controls we tested the appropriateness of journal entries made
throughout the year by applying specific risk criteria as well as journals throughout the year which did not match the risk criteria,
verified to supporting documents and obtained an understanding of the business rationale for each of the journal entries;
– We performed a detailed review of the Group’s year end adjusting and consolidation entries and investigated any that appeared
unusual as to nature or amount through inquiry with management and verified to supporting evidence where necessary;
– We assessed whether the judgements made and accounting estimates were indicative of a potential bias;
– We specifically considered the facts and circumstances arising from the internal investigation as to any current year impacts;
– We communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and
component auditors, who were deemed to have the appropriate competence and capabilities, and remained alert to any
indications of fraud or non-compliance with laws and regulations throughout the audit;
– The component teams also considered the susceptibility of the financial statements due to fraud in respect of the relevant
components. Testing of management override was completed by the component teams through testing the appropriateness of
a sample of journal entries in line with the journal testing procedures as detailed above and assessment of risk of management
bias on the significant judgements and estimates as detailed in note 1.3;
– We applied professional scepticism in our audit procedures and performed randomised procedures to include a level of
unpredictability; and
– We performed an assessment of the Group’s IT and the wider control environment and as part of this work obtained an
understanding of the design and implementation of IT access controls.
Braemar Plc Annual Report and Accounts 2024
89
Strategic Report Governance Financial Statements
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the
risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations
in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
Oliver Chinneck (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
22 May 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Braemar Plc Annual Report and Accounts 2024
90
Consolidated Income Statement
For the year ended 29 February 2024
29 Feb 2024
28 Feb 2023
Specific Specific
Underlying items TotalUnderlyingitemsTotal
Notes£’000£’000£’000£’000£’000£’000
Revenue
2.1
1 52 ,751
–
1 52 ,7 51
152 ,9 1 1
–
1 52 ,9 11
Other operating income
2.2
–
83
83
–
3,846
3,8 46
Operating expense:
Operating costs
2.3, 2.2
(134,004)
(3 ,1 82)
(137 ,186)
(13 2 , 5 9 8)
(3 5 5)
(1 3 2 ,9 5 3)
Acquisition-related expenditure
2.2
(1 ,5 02)
(4,405)
(5, 907)
–
(1,999)
(1,999)
Impairment of financial assets
2.3, 2.2
(6 9 7)
–
(6 9 7)
(2 3 8)
(8 4 8)
(1,086)
Impairment of goodwill
2.2
–
–
–
–
(9, 0 5 0)
(9,0 5 0)
Total operating expense
(1 3 6 , 2 0 3)
(7 ,587)
(1 4 3 ,7 9 0)
(132,836)
(12 , 252)
(1 4 5 , 08 8)
Operating profit
16,54 8
(7 ,504)
9,0 4 4
2 0, 075
(8 , 4 0 6)
1 1 ,6 69
Share of associate profit/(loss) for the
year
3.4
12
–
12
(2 3)
–
(2 3)
Finance income
2.5, 2.2
871
41 9
1 , 290
119
83
20 2
Finance costs
2.5, 2.2
(2 ,8 2 3)
–
(2 , 82 3)
(2 ,131)
(2 66)
(2 ,3 97)
Profit before tax from continuing
operations
14 ,60 8
(7, 0 8 5)
7, 5 2 3
18 ,0 4 0
(8 , 5 8 9)
9 ,4 51
Taxation
2.7
(3 , 7 8 8)
889
(2 , 8 9 9)
(4 , 6 41)
(2 14)
(4,855)
Profit from continuing operations
10,820
(6 ,1 9 6)
4 ,6 24
13,399
(8 , 8 0 3)
4,59 6
Profit attributable to equity
shareholders of the Company
10,820
(6 ,1 96)
4 ,6 24
13,399
(8 , 8 0 3)
4,59 6
Underlying
Total
Underlying
Total
Earnings per ordinary share
Basic
2.8
36.62p
15.65p
4 6. 22p
15.85p
Diluted
2.8
29.96p
12 .80p
38.52p
13. 25p
The accompanying notes on pages 95-148 form an integral part of these Financial Statements.
Braemar Plc Annual Report and Accounts 2024
91
Strategic Report Governance Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 29 February 2024
Notes
29 Feb 202428 Feb 2023
£’000£’000
Profit for the year
4,6 24
4,59 6
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss:
–
– Actuarial gain on employee benefit schemes – net of tax
5.1
173
2 ,361
Items that may be reclassified to profit or loss:
– Foreign exchange differences on retranslation of foreign operations
6.4
(1 , 7 8 3)
2 ,52 2
– Net investment hedge
6.4
249
(1 24)
– Cash flow hedges – net of tax
6.4
1 , 2 31
291
Other comprehensive (expense)/income
(1 3 0)
5,0 5 0
–
Total comprehensive income attributable to owners of the parent
4,494
9 ,6 4 6
The accompanying notes on pages 95-148 form an integral part of these Financial Statements.
Braemar Plc Annual Report and Accounts 2024
92
Consolidated Balance Sheet
As at 29 February 2024
Notes
As at As at
29 Feb 202428 Feb 2023
£’000£’000
Assets
Non-current assets
Goodwill
3.1
71 ,3 37
71,40 7
Other intangible assets
3.2
3, 185
3,980
Property, plant and equipment
3.5
5,582
5,320
Other investments
3.3
1,633
1 ,780
Investment in associate
3.4
713
70 1
Derivative financial instruments
4.4
249
30
Deferred tax assets
2.7
2 , 979
4,79 4
Pension surplus
5.1
1 ,414
1 ,1 2 0
Other long-term receivables
4.1
4,589
8,55 4
91 ,6 81
9 7, 6 8 6
Current assets
Trade and other receivables
4.2
37 ,730
4 3,323
Derivative financial instruments
4.4
1 , 287
1 , 2 24
Current tax receivable
2.7
2 ,925
97 3
Cash and cash equivalents
4.5
2 7, 9 5 1
34,73 5
69, 893
8 0, 255
Total assets
161,57 4
1 7 7, 9 4 1
Liabilities
Current liabilities
Derivative financial instruments
4.4
175
1 ,1 2 2
Trade and other payables
4.3
4 3 ,61 1
5 7, 3 1 0
Current tax payable
2.7
1 ,62 5
4 ,1 4 1
Provisions
7.1
3 ,0 80
2,575
Convertible loan notes
4.7
632
699
4 9 ,1 2 3
65 ,8 47
Non-current liabilities
Long-term borrowings
4.6
29,819
2 9,9 19
Deferred tax liabilities
2.7
8
34 4
Derivative financial instruments
4.4
183
1 ,0 2 2
Trade and other payables
416
5 42
Provisions
7.1
58
734
Convertible loan notes
4.7
2 ,346
2 ,8 52
32,830
35,4 13
Total liabilities
81,95 3
101 , 260
Total assets less total liabilities
79,62 1
76 ,6 8 1
Equity
Share capital
6.1
3, 292
3, 292
Share premium
6.1
–
53,796
ESOP reserve
6.3
(7,1 4 0)
(1 0, 607)
Other reserves
6.4
8,365
28, 81 9
Retained earnings
7 5 ,1 0 4
1,381
Total equity
79,62 1
76 ,6 8 1
The Financial Statements on pages 90-148 were approved by the board of directors on 22 May 2024 and were signed on its
behalf by:
James Gundy Grant Foley
Group Chief Executive Officer Group Chief Financial Officer
Registered number: 02286034
Braemar Plc Annual Report and Accounts 2024
93
Strategic Report Governance Financial Statements
Consolidated Cash Flow Statement
For the year ended 29 February 2024
Notes
29 Feb 202428 Feb 2023
£’000£’000
Profit before tax
7, 5 2 3
9,4 51
Adjustment for:
Depreciation and amortisation charges
3.2, 3.5
3, 80 5
3,36 4
Loss on disposal of intangible assets
–
87
Net loss on disposal of property, plant and equipment
–
20
Share scheme charges
6, 4 42
4,52 0
Net foreign exchange loss/(gain) with no cash impact
4 97
(1 ,1 5 7)
Gain on acquisition of Southport
2.2
–
(3 ,6 4 3)
Gain relating to disposal of Cory Brothers
2.2
(8 3)
(2 0 3)
Fair value loss on unlisted investments
2.2
147
–
Impairment of Naves goodwill
3.1
–
9,0 5 0
Impairment of property, plant and equipment
3.5
–
150
Impairment of intangible assets
3.2
–
60
Impairment of financial asset
2.2
–
848
Reversal of dilapidations provision
7.1
–
(1 24)
Adjustment for non-operating transactions included in profit before tax:
Net finance cost
2.5
1,533
2, 195
Share of (profit)/loss in associate from continuing and discontinued operations
3.4
(1 2)
23
Adjustment for cash items in other comprehensive income/expense:
Fair value movement on financial instruments charged to profit or loss
89
–
Cash settlement of share-based payment
(5 2)
–
Contribution to defined benefit scheme
5.1
(3 7)
(4 5 0)
Operating cash flow before changes in working capital
19,85 2
24 ,1 9 1
Decrease/(increase) in receivables
6, 252
(14,857)
(Decrease)/increase in payables
(12 ,14 2)
16,836
(Decrease)/increase in provisions
(138)
2,081
Cash flows from operating activities
1 3 ,8 24
2 8 , 2 51
Interest received
50 8
119
Interest paid
(2 , 67 7)
(1 ,9 25)
Tax paid, net of refunds
(6 , 47 3)
(4 , 3 8 1)
Net cash generated from operating activities
5, 182
2 2,0 6 4
Cash flows from investing activities
Purchase of property, plant and equipment
3.5
(5 0 3)
(6 9 5)
Purchase of other intangible assets
3.2
(3 2)
(9 0)
Acquisition of business (cash acquired)
2.2
–
349
Proceeds related to disposal of Cory Brothers
4.9
1, 3 97
6,50 0
Principal received on finance lease receivables
3.6
6 26
6 07
Net cash generated from investing activities
1,488
6,67 1
Cash flows from financing activities
Proceeds from RCF loan facility
4,500
7, 6 9 4
Repayment of RCF loan facility
(5 ,0 9 8)
(3, 000)
Repayment of principal under lease liabilities
3.6
(3 ,1 4 3)
(3, 865)
Cash proceeds on issue of new shares
6.1
–
694
Cash proceeds on exercise of share awards settled by release of shares from ESOP
82 6
47 7
Dividends paid
6.2
(2 , 4 4 0)
(3, 190)
Purchase of own shares
6.3
(6 ,1 2 5)
(7 ,963)
Settlement of convertible loan notes
4.7
(5 9 8)
(1 , 4 4 8)
Net cash used in financing activities
(12 ,07 8)
(1 0,601)
(Decrease)/increase in cash and cash equivalents
(5 , 4 0 8)
1 8 ,1 3 4
Cash and cash equivalents at beginning of the year
4.5
34 ,7 35
13,964
Foreign exchange differences
(1 , 3 76)
2 ,6 37
Cash and cash equivalents at end of the year
4.5
2 7, 9 5 1
3 4,7 35
The accompanying notes on pages 95-148 form an integral part of these Financial Statements.
Braemar Plc Annual Report and Accounts 2024
94
Consolidated Statement of Changes in Total Equity
For the year ended 29 February 2024
Notes
Retained
Share Other (deficit)/ Total
Share capital premiumESOP reservereservesearningsequity
£’000£’000£’000£’000£’000£’000
At 1 March 2022
3,22 1
5 3 ,0 30
(6 ,7 7 1)
2 6 ,1 3 0
(4 ,1 1 9)
71, 491
Profit for the year
–
–
–
–
4,596
4,59 6
Actuarial gain on employee benefits
schemes – net of tax
–
–
–
–
2,361
2 ,361
Foreign exchange differences
–
–
–
2,52 2
–
2, 52 2
Cash flow hedges – net of tax
–
–
–
291
–
291
Net investment hedge
–
–
–
(1 24)
–
(1 24)
Other comprehensive income
–
–
–
2 ,689
2,361
5,0 50
Total comprehensive income
–
–
–
2,689
6 ,957
9,6 4 6
Transactions with owners in their
capacity as owners:
Deferred tax income on share
awards
–
–
–
–
863
863
Dividends
6.2
–
–
–
–
(3, 190)
(3, 190)
Shares issued
6.1
71
76 6
–
–
–
8 37
Acquisition of own shares
–
–
(7 ,963)
–
–
(7 ,963)
ESOP shares allocated
6.3
–
–
4 ,1 2 7
–
(3 ,6 5 0)
47 7
Share-based payments
5.2
–
–
–
–
4 ,520
4,52 0
71
76 6
(3 , 8 3 6)
–
(1 ,4 57)
(4 ,4 5 6)
At 28 February 2023
3, 292
53 ,796
(10 ,6 07)
28,819
1 ,381
76 , 68 1
Profit for the year
–
–
–
–
4,6 24
4 ,62 4
Actuarial gain on employee benefits
schemes – net of tax
–
–
–
–
173
173
Foreign exchange differences
–
–
–
(1 ,7 8 3)
–
(1 , 7 8 3)
Net investment hedge
–
–
–
249
–
249
Cash flow hedges – net of tax
–
–
–
1 , 231
–
1, 231
Other comprehensive income
–
–
–
(3 0 3)
173
(1 3 0)
Total comprehensive income
–
–
–
(3 0 3)
4, 797
4 ,494
Transactions with owners in their
capacity as owners:
Tax on share awards
2.7
–
–
–
–
(20 5)
(20 5)
Dividends
6.2
–
–
–
–
(2 , 4 4 0)
(2 , 4 4 0)
Capital reduction
6.4
–
(5 3 , 7 96)
–
(2 0 ,1 5 1)
7 3 , 9 47
–
Acquisition of own shares
6.3
–
–
(6 ,1 2 5)
–
–
(6 ,1 2 5)
ESOP shares allocated
6.3
–
–
9,592
–
(8 , 76 6)
826
Cash paid for share-based
payments
5.2
–
–
–
–
(52)
(5 2)
Share-based payments
5.2
–
–
–
–
6 , 44 2
6 , 44 2
–
(5 3 ,7 9 6)
3, 4 67
(2 0 ,1 5 1)
68 ,9 26
(1 , 5 5 4)
At 29 February 2024
3, 292
–
(7, 1 4 0)
8,365
7 5 ,10 4
79,6 21
The accompanying notes on pages 95-148 form an integral part of these Financial Statements.
Braemar Plc Annual Report and Accounts 2024
95
Strategic Report Governance Financial Statements
Notes to the Financial Statements
General information
Braemar plc (the “Company”) is a public company limited by shares incorporated in the United Kingdom under the Companies Act.
The Company is registered in England and Wales and its registered address is 1 Strand, Trafalgar Square, London, United Kingdom,
WC2N 5HR . The consolidated Financial Statements of the Company as at and for the year ended 29 February 2024 comprise the
Company and its subsidiaries (together referred to as the “Group”).
The Group Financial Statements of Braemar Plc for the year ended 29 February 2024 were authorised for issue in accordance with
a resolution of the directors on 22 May 2024.
1 Basis of preparation
1.1 Basis of preparation and forward-looking statements
The Consolidated Financial Statements have been prepared in accordance with UK-adopted international accounting standards
and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.
The Financial Statements have been prepared under the historic cost convention except for items measured at fair value as set
out in the accounting policies below.
The consolidated Financial Statements incorporate the Financial Statements of Braemar Plc and all its subsidiaries made up to
28 February each year or 29 February in a leap year.
Subsidiaries are entities that are controlled by the Group. Control exists when the Group has the rights to variable returns from its
involvement with an entity and has the ability to affect those returns through its power over the entity. The results of subsidiaries
sold or acquired during the year are included in the accounts up to, or from, the date that control exists. All intercompany balances
and transactions have been eliminated in full.
Certain statements in this Annual Report are forward-looking. Although the Group believes that the expectations reflected in these
forward-looking statements are reasonable, it gives no assurance that these expectations will prove to have been correct. These
forward-looking statements involve risks and uncertainties, so actual results may differ materially from those expressed or implied
by these forward-looking statements.
The Group Financial Statements are presented in sterling and all values are rounded to the nearest thousand sterling (£’000)
except where otherwise indicated.
New standards, amendments and interpretations effective for the financial year beginning 1 March 2023
The following amendments to IFRS Accounting Standards have been applied for the first time by the Group:
– IFRS 17 “Insurance Contracts” (including the June 2020 and December 2021 Amendments to IFRS 17);
– Amendments to IAS 12 “Income Taxes” – Deferred Tax related to Assets and Liabilities arising from a Single Transaction;
– Amendments to IAS 1 “Presentation of Financial Statements” and IFRS Practice Statement 2 “Making Materiality Judgements –
Disclosure of Accounting Policies”;
– Amendments to IAS 12 “Income Taxes – International Tax Reform – Pillar Two Model Rules”; and
– Amendments to IAS 8 “Accounting Polices, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates”.
The Group has adopted the amendments to IAS 1 in the current year. The amendments change the requirements in IAS 1 with
regard to disclosure of accounting policies. The amendments replace all instances of the term ‘significant accounting policies’
with ‘material accounting policy information’. Accounting policy information is material if, when considered together with other
information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users
of general purpose financial statements make on the basis of those financial statements. The Group has reviewed the impact of
the changes to IAS 1, which has resulted in some immaterial accounting policies being removed and updates to the presentation
of the financial statements to aid users in their understanding and navigation.
The adoption of the above has not had any material impact on the amounts reported or the disclosures in these
financial statements.
New standards, amendments and interpretations issued but not yet effective for the financial year beginning 1 March
2023 and not early adopted
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided not to adopt early.
The following amendments are effective in future periods and have not been early adopted by the Group:
– Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28);
– Classification of Liabilities as Current or Non-current (Amendments to IAS 1);
– Non-current Liabilities with Covenants (Amendments to IAS 1);
– Supplier Finance Arrangement (Amendments to IAS 7 and IFRS 7); and
– Lease Liability in a Sale and Leaseback (Amendments to IFRS 16).
The adoption of these standards and amendments is not expected to have a material impact on the Financial Statements of the
Group in future periods.
Braemar Plc Annual Report and Accounts 2024
96
1 Basis of preparation continued
1.1 Basis of preparation and forward-looking statements continued
New standards, amendments and interpretations issued but not yet effective for the financial year beginning 1 March
2023 and not early adopted continued
In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to determine whether liabilities are classified
as current or non-current. These amendments clarify that current or non-current classification is based on whether an entity
has a right at the end of the reporting period to defer settlement of the liability for at least 12 months after the reporting period.
The amendments also clarify that “settlement” includes the transfer of cash, goods, services, or equity instruments unless the
obligation to transfer equity instruments arises from a conversion feature classified as an equity instrument separately from
the liability component of a compound financial instrument. Following concerns raised by stakeholders, the IASB issued further
amendments in October 2022 to specify that only those covenants which an entity must comply with on or before the reporting
period should affect classification of the corresponding liability as current or non-current. The October 2022 amendments defer
the effective date of the January 2020 amendments by one year in order that both sets of amendments are effective for annual
reporting periods beginning on or after 1 January 2024 with earlier application permitted.
Under the Group’s current accounting policy, a financial liability with an equity conversion feature is classified as current or non-
current disregarding the impact of the conversion option. The amendments to IAS 1 will result in the equity conversion feature
relating to certain of the Group’s financial liabilities, impacting the classification of those liabilities. While the Group’s assessment
of the impact is ongoing, the Group expects that amounts included as non-current in relation to “Convertible Loan Notes” will be
reclassified to current liabilities.
The Company has elected to prepare its Parent Company Financial Statements in accordance with Financial Reporting Standard
101 Reduced Disclosure Framework (“FRS 101”).
1.2 Going concern
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 to 31 August 2025 which is more than
12 months from the date of signing of these Financial Statements.
A set of cash flow forecasts (“the base case”) have been prepared by management to cover the going concern period and
reviewed by the directors based on revenue and cost forecasts considered reasonable in the light of work done on budgets
for the current year and the current shipping markets. In putting together these forecasts, particular attention was paid to the
following factors:
– Expected market demand, the impact on market rates and the Group’s forward order book.
– The Group’s compliance with sanctions put in place as a result of the conflict in the Ukraine has meant additional work
reviewing compliance obligations on a regular basis as the laws have been amended but did not have a material effect on
trading in FY24, nor is it expected to have an impact in FY25.
– The level of likely cost inflation, particularly around salaries.
– Geopolitical tensions can cause volatility in shipping markets, but, if anything, that uncertainty can give rise to additional
opportunities for the business to support the industry and clients further. There is therefore no expectation that the current
global political tensions will have an adverse impact on trading in FY25.
– The impact of climate change is not expected to have any material impact on the business in the short term and indeed
could lead to additional opportunities.
The directors have considered trading performance during the current year and have concluded that none of these factors are
currently likely to have a significantly adverse impact on the Group’s future cash flows.
The Group continues to have a strong balance sheet, as at 29 February 2024 the Group held net bank cash of £1.0 million (2023:
£6.9 million). As at 30 April 2024 the Group had net bank cash of £8.9 million.
Notes
30 April 29 Feb 28 Feb
2024 2024 2023
£ million £ million £ million
Secured revolving credit facilities
4.6
(23.0)
(27.0)
(27.8)
Cash
4.5
31.9
28.0
34.7
Net cash
8.9
1.0
6.9
The Group continued to maintain a revolving credit facility (“RCF”) with its main bankers, HSBC throughout the year. The RCF is for
£30.0 million plus an accordion limit of £10.0 million and has an initial termination date of November 2025 with an option, subject
to lender approval, to extend the term of the facility by 24 months. Drawdown of the accordion facility is subject to additional
credit approval. It has an EBITDA leverage covenant of 2.5x and a minimum interest cover of 4x. At 31 May 2023, 31 August 2023,
30 November 2023 and 29 February 2024 the Group met all financial covenant tests. In addition, there is a further requirement to
provide HSBC with the Group’s audited financial statements within six months of the year-end. Due to the delay in completing the
FY23 audited financial statements, the Group obtained waivers for this in advance so there was no breach of this requirement.
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
97
Strategic Report Governance Financial Statements
The cash flow forecasts in the base case assessed the ability of the Group to operate both within the banking covenants and the
facility headroom, including a number of downside sensitivities on budgeted revenue, including a reverse stress test scenario. The
directors consider revenue as the key assumption in the Group’s budget. The cost base is largely fixed or made up of discretionary
bonuses, which are directly linked to profitability. Based on two flex scenarios; a revenue decrease of 7.5% and a revenue decrease
of 15% from the base case, only very minor mitigations were necessary to meet banking covenants.
A reverse stress test was also performed to ascertain the point at which the covenants would be breached in respect of the key
assumption of budgeted revenue decline. This test indicated that the business, alongside certain mitigating actions which are
fully in control of the directors, would be capable of withstanding a reduction of approximately 38% in budgeted revenue from the
base case assumptions from March 2024 through to May 2025. In light of current trading, forecasts and the Group’s performance
over FY24, the directors assessed this downturn in revenue and concluded the likelihood of such a reduction remote, especially
in the light of the forward order book of $83 million at the end of February 2024 ($38 million of which is for the financial year
ending February 2025), such that it does not impact the basis of preparation of the Financial Statements and there is no material
uncertainty in this regard.
1.3 Use of estimates and critical judgements
The preparation of the Group’s Financial Statements requires management to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting
date. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these
estimates and assumptions. Key estimates are those that the Group has made in the process of applying the Group’s accounting
policies and that have a significant risk of resulting in material adjustments to the carrying amounts of assets and liabilities within
the next financial year. Critical judgements are those that the Group makes, apart from those involving estimations, that the
directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the
amounts recognised in the Financial Statements.
The following table provides a summary of the Group’s key estimates and critical judgements, along with the location of more
detailed information relating to those judgements.
Judgements
excluding
Judgement applied to
estimates
Estimates
Location of further information
Acquisition accounting for business combinations
Yes
Yes
Note 1.4a – Business Combinations
Revenue recognition
Yes
Note 2a – Revenue Recognition
Classification and recognition of specific items
Yes
Note 2.2 – Specific items
Impairment of goodwill
Yes
Note 3.1 – Goodwill
Provision for impairment of trade receivables
and contract assets
Yes
Note 4.2 – Trade and other receivables
Measurement of deferred and contingent Note 4.8 – Deferred and contingent
consideration receivable
Yes
consideration receivable
Recoverability and valuation of defined benefit
pension scheme
Yes
Yes
Note 5.1 – Long-term employee benefits
Share option vesting
Yes
Note 5.2 – Share-based payments
Uncertain commission obligations
Yes
Note 7.1 – Provisions
Climate-related risks and opportunities
Management has considered the impact of climate-related risks in respect of impairment of goodwill, recoverability of receivables
and the recoverability of deferred tax assets in particular and does not consider that climate-related risks have a material impact
on any key judgements, estimates or assumptions in the consolidated Financial Statements.
In the prior year, climate change was assessed as part of ongoing discussions of key and emerging risks for the Group and
the shipping and energy sectors within which it operates. Consideration of the potential short to medium-term impact of the
Environment and Climate Change risk resulted in its inclusion as a Group Principal Risk.
1.4 Material accounting policies
The accounting policies applied by the Group in relation to specific transactions and balances are disclosed in the note to which
they relate. The following section includes those accounting policies which apply pervasively across the Financial Statements and
to avoid repetition are disclosed in this note.
Braemar Plc Annual Report and Accounts 2024
98
1 Basis of preparation continued
1.4 Material accounting policies continued
a) Business combinations
Key estimate
Acquisition accounting
Business combinations are accounted for under the acquisition method, based on the fair values of the consideration paid.
Assets and liabilities, with limited exceptions, are measured at their fair value at the acquisition date. The Group estimates the
provisional fair values and useful lives of acquired assets and liabilities at the date of acquisition. The valuation of acquired
intangibles is subject to estimation of future cash flows and the discount rate applied to them. The valuation of the customer-
related intangible assets is determined based on an excess earnings methodology while the valuation of the marketing-related
intangible asset is based on a royalty savings method.
Key judgement
Assessment of business combinations
During the prior year, the Group acquired the entity Madrid Shipping Advisors S.L. For a business combination to exist, the
Group must obtain control of a business. To be considered a business, an acquired set of activities and assets must include,
at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. As
part of the transaction, no assets were acquired (such as brand, order book, property, plant and equipment), nor were any
liabilities assumed. The entity holds the service contracts for key employees and was a newly incorporated company, set
up specifically for the acquisition. The Group has made the judgement that the acquisition did not meet the definition of a
business combination as the acquired entity did not meet the definition of a business. The transaction was treated as the
recruitment of a broker team, which is consistent with the substance of the arrangement.
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
– fair values of the assets acquired;
– liabilities incurred to the former owners of the acquired business;
– equity interests issued by the Group;
– fair value of any asset or liability resulting from a contingent consideration arrangement; and
– fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity
on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired
entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred; amount of any non-controlling interest in the acquired entity; and acquisition-date
fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded
as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is
recognised directly in profit or loss as a gain on purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value, with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are
recognised in profit or loss.
Due to the nature of the Group’s business, amounts paid or shares issued to sellers are often linked to their continued employment.
An assessment is performed to determine whether the amounts are part of the exchange for the acquiree, or should be treated
as a transaction separate from the business combination. Transactions that are separate from the business combination are
accounted for in accordance the relevant IFRSs which generally results in the amounts being treated as a post-combination
remuneration expense.
Notes to the Financial Statements continued
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99
Strategic Report Governance Financial Statements
b) Foreign currencies
Transactions and balances
Transactions in currencies other than sterling are recorded at the rates of exchange prevailing on the date of the transaction.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currency are recognised in the Income Statement.
In order to hedge its exposure to certain foreign exchange risks, the Group enters into derivative financial instrument contracts,
mainly forward foreign currency exchange contracts which are designated as cash flow hedges (see Note 4.4). For a qualifying
hedge relationship, the fair value gain or loss on the hedging instrument is recognised as part of revenue when the underlying
transaction is recognised in accordance with the Group’s revenue recognition policy.
Translation to presentation currency
The presentational currency of the Group is sterling. Assets and liabilities of overseas subsidiaries, branches and associates are
translated from their functional currency into sterling at the exchange rates ruling at the Balance Sheet date. Trading results are
translated at the average rates for the period. Exchange differences arising on the consolidation of the net assets of overseas
subsidiaries are recognised through other comprehensive income in the foreign currency translation reserve (see Note 6.4).
On disposal of a business, the cumulative exchange differences previously recognised in the foreign currency translation reserve
relating to that business are transferred to the Income Statement as part of the gain or loss on disposal. The Group finances
overseas investments partly through the use of foreign currency borrowings in order to provide a net investment hedge over the
foreign currency risk that arises on translation of its foreign currency subsidiaries. For effective hedge relationships, the gain or loss
on the hedging instrument is recognised in equity through other comprehensive income.
c) Impairment
The carrying amount of the Group’s assets, other than financial assets within the scope of IFRS 9 and deferred tax assets, are
reviewed for impairment as described below. If any indication of impairment exists, the asset’s recoverable amount is estimated.
The recoverable amount is determined based on the higher of value-in-use calculations and fair value less costs to sell, which
requires the use of estimates. An impairment loss is recognised in the Income Statement whenever the carrying amount of the
assets exceeds its recoverable amount.
Goodwill is reviewed for impairment at least annually. Impairments are recognised immediately in the Income Statement. Goodwill
is allocated to cash-generating units for the purposes of impairment testing.
The carrying value of intangible assets with a finite life is reviewed for impairment whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. The carrying values of other intangible assets are reviewed for impairment
at least annually or when there is an indication that they may be impaired.
Right-of-use assets are reviewed for impairment to account for any loss when events or changes in circumstances indicate the
carrying value may not be fully recoverable.
Where there is objective evidence that the investment in an associate has been impaired, the carrying amount of the investment
is tested for impairment in the same way as other non-financial assets.
Where an impairment loss subsequently reverses, the carrying amount of the assets, with the exception of goodwill, is increased
to the revised estimate of its recoverable amount. This cannot exceed the carrying amount prior to the impairment charge.
An impairment recognised in the Income Statement in respect of goodwill is not subsequently reversed.
d) Contingent assets
Contingent assets are not recognised but are disclosed where an inflow of economic benefits is probable.
2 Performance-related information
Revenue recognition
Key judgement
Revenue recognition
IFRS 15 “Revenue from Contracts with Customers” requires judgement to determine whether revenue is recognised at a
“point in time” or “over time” as well as determining the transfer of control for when performance obligations are satisfied.
For Chartering, in relation to single voyages, the Group has defined the performance obligation to be satisfied at the point
in time where the negotiated contract between counterparties has been successfully completed, being the discharge of
cargoes, and therefore revenue is recognised at this point in time. This is a critical judgement since revenue recognition
would differ if the performance obligations were deemed to be satisfied over a time period, or at a different point in time.
For time charters, the performance obligation is to provide operational support and act on behalf of the principal over the
course of hire. As a result, the Group believes the performance obligation is satisfied over the period of hire and revenue is
recognised accordingly.
Braemar Plc Annual Report and Accounts 2024
100
2 Performance related information continued
Revenue recognition continued
Revenue is recognised in accordance with satisfaction of performance obligations. Revenue of the Group consists of:
i) Chartering desks – The Group acts as a broker for several types of shipping transactions, each of which gives rise to an
entitlement to commission:
Deep Sea Tankers, Specialised Tankers and Gas, Dry Cargo and Offshore:
– for single voyage chartering, the contractual terms are governed by a standard charterparty contract in which the broker’s
performance obligation is satisfied when the cargo has been discharged according to the contractual terms; and
– for time charters, the commission is specified in the hire agreement and the performance obligation is spread over the term
of the charter at specified intervals in accordance with the charter party terms.
ii) Risk Advisory desks
Securities:
– for income derived from commodity broking, the commission is recognised when a binding contractual arrangement is
entered into between the two parties, at which point, the Group has fulfilled its performance obligation.
iii) Investment Advisory
Financial:
– income comprises retainer fees and success fees generated by corporate finance-related activities. Revenue is recognised
in accordance with the terms agreed in individual client terms of engagement. Recurring monthly retainers allow customers
to benefit from services when required, and as such, are generally recognised in the month of invoice. Success fees are
recognised at the point when the performance obligations of the particular engagement are fulfilled.
Sale and Purchase:
– in the case of second-hand sale and purchase contracts, the broker’s performance obligation is satisfied when the principals
in the transaction complete on the sale/purchase and the title of the vessel passes from the seller to the buyer;
– with regard to newbuilding contracts, the commission is recognised when contractual stage payments are made by the
purchaser of a vessel to a shipyard which in turn reflects the performance of services over the life of the contract; and
– for income derived from providing ship and fleet valuations, the Group recognises income when a valuation certificate is
provided to the client and the service is invoiced.
Dividend income from investments is recognised when the right to receive payment is established.
2.1 Business segments
Based on the way in which information is presented to the Group’s Chief Operating Decision Maker, the Group’s operating
segments are Chartering, Investment Advisory and Risk Advisory. The Chief Operating Decision Maker is considered to be the
Group’s board of directors. These three segments are managed separately on the basis of the nature of the services offered to
clients and differences in the regulatory environment applicable to each segment.
The table below shows the make-up of the Group’s segments by underlying component.
Segment
Component
Chartering
Deep Sea Tankers
Specialised Tankers
Offshore
Dry Cargo
Segment
Component
Investment Advisory
Corporate Finance
Sale and Purchase
Segment
Component
Risk Advisory
Securities
Each of Chartering, Investment Advisory and Risk Advisory are managed separately, and the nature of the services offered to
clients is distinct between the segments. The Chartering segment includes the Group’s shipbroking business, Risk Advisory
includes the Group’s regulated securities business and Investment Advisory focuses on transactional services.
Notes to the Financial Statements continued
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101
Strategic Report Governance Financial Statements
The segmental analysis is consistent with the way the Group manages itself and with the format of the Group’s internal financial
reporting. The board considers the business from both service line and geographic perspectives. A description of each of the lines
of service is provided in the Operating and Financial Review. The Group’s main geographic markets comprise the UK, Singapore,
the US, Australia, Switzerland, Germany and the Rest of the World. The Group’s geographical markets are determined by the
location of the Group’s assets and 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 specific items, including restructuring
costs, gain/loss on disposal of investments and acquisition and disposal-related items.
The segmental information provided to the board for reportable segments for the year ended 29 February 2024 is as follows:
Revenue
Operating profit
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Chartering
103,945
99,164
13,630
15,577
Investment Advisory
25,696
36,760
3,872
7,740
Risk Advisory
23,110
16,987
4,086
2,971
Trading segments revenue/results
152,751
152,911
21,588
26,288
Central costs
(5,040)
(6,213)
Underlying operating profit
16,548
20,075
Specific items included in operating profit
(7,504)
(8,406)
Operating profit
9,044
11,669
Share of associate’s profit/(loss) for the year
12
(23)
Net finance expense
(1,533)
(2,195)
Profit before taxation
7,523
9,451
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:
Revenue
2024 2023
£’000 £’000
United Kingdom
81,088
80,353
Singapore
19,885
26,674
Australia
9,556
16,599
Switzerland
5,863
11,112
United States
20,479
6,255
Germany
1,287
2,951
Rest of the World
14,593
8,967
Total
152,751
152,911
Braemar Plc Annual Report and Accounts 2024
102
2 Performance related information continued
2.1 Business segments continued
Revenue analysis
The Group disaggregates revenue in line with the segmental information presented above and also by desk. Revenue analysed by
desk is provided below.
2024 2023
£’000 £’000
Tankers
54,656
41,602
Specialised Tankers
19,239
16,240
Dry Cargo
22,139
35,821
Offshore
7,911
5,501
Chartering total
103,945
99,164
Sales and purchase
23,543
32,060
Corporate finance
2,153
4,700
Investment Advisory total
25,696
36,760
Securities
23,110
16,987
Risk Advisory total
23,110
16,987
Total continuing operations
152,751
152,911
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 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 at the Balance Sheet date. The amount of revenue
that will be recognised in future periods on these contracts when those remaining performance obligations are satisfied is set
out below:
Forward order book
2024
Within More than
12 months 1–2 years 2 years Total
£’000 £’000 £’000 £’000
Chartering
18,686
4,904
8,925
32,515
Sale and purchase
11,562
9,567
11,683
32,812
Total
30,248
14,471
20,608
65,327
2023
Within More than
12 months 1–2 years 2 years Total
£’000 £’000 £’000 £’000
Chartering
19,209
3,040
9,860
32,109
Sale and purchase
3,332
4,988
6,168
14,488
Total
22,541
8,028
16,028
46,597
2.2 Specific items
Specific items are significant items considered material in size or nature (including acquisition and disposal-related gains and
losses) as well as items which are not considered to be part of the trading performance of the business in the current year. These
are disclosed separately to enable a full understanding of the Group’s ongoing financial performance, but may not be comparable
with disclosures provided by other companies. The Group’s adjusted performance measures are reviewed by the Group’s Chief
Operating Decision Maker and are used as the basis to determine the discretionary bonus pools and measure earnings per share
performance related to targets for awards under the Group’s Long Term Incentive Plan.
Notes to the Financial Statements continued
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Strategic Report Governance Financial Statements
Key judgement
Classification and recognition of specific items
In reporting financial information, the Group presents Alternative Performance Measures (“APMs”) which are not defined or
specified under the requirements of International Financial Reporting Standards (“IFRS”). The Group believes that these APMs,
which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful
information and enable an alternative comparison of performance over time.
The Group excludes specific items from its underlying earnings measures. Management judgement is required as to what
items qualify for this classification. There can also be judgement as to the point at which costs should be recognised and
the amount to record to ensure that the understanding of the underlying performance is not distorted. Further details of the
Group’s specific items are included in the note below.
2024 2023
£’000 £’000
Other operating income:
– Gain on purchase of Southport
–
3,643
– Gain on revaluation of Cory contingent consideration receivable
83
203
83
3,846
Operating costs:
– Commission obligation
–
(257)
– Investigation costs
(2,616)
–
– Board change costs
(190)
–
– Unlawful dividend rectification
(229)
–
– Impairment of financial assets
–
(848)
– Impairment of goodwill
–
(9,050)
– Other operating costs
(147)
(98)
(3,182)
(10,253)
Acquisition-related items:
– Consideration treated as an employment expense
(3,580)
(1,325)
– Madrid post-contractual obligation
(376)
(264)
– Acquisition of Naves Corporate Finance GmbH
–
(60)
– Amortisation of acquired intangible assets
(449)
(350)
(4,405)
(1,999)
Other items:
– Finance income – Cory Brothers earnout deferred consideration receivable
86
83
– Finance income/(expense) – foreign exchange and derivative gain/(loss) on Naves liability
333
(266)
419
(183)
Total
(7,085)
(8,589)
Other operating income
A gain on purchase in relation to the acquisition of Southport was recognised in the prior year. The Group does not consider
this gain to reflect the performance of the business in the year, and so is treated as a specific item.
Revaluation of the contingent receivable due in respect of the Cory Brothers disposal resulted in a gain of £0.1 million
(2023: £0.2 million). See Note 4.9 for further details.
The tax charge on specific items included within other operating income was £nil (2023: £nil).
Operating costs
Investigation costs
During the preparation of the 2023 Annual Report, the board instigated an investigation into a transaction which originated in 2013
and involved payments being made through to 2017. The investigation engaged multiple external specialist firms and resulted in
a significant cost to the business of £2.6 million in the year to 29 February 2024 which the Group does not consider reflects the
trading of the business in the year and as a result is treated as a specific item. No significant further costs are expected in FY25.
Braemar Plc Annual Report and Accounts 2024
104
2 Performance related information continued
2.2 Specific items continued
Operating costs continued
Board change costs
The Group appointed a new Chief Financial Officer with effect from 1 August 2023 to replace Nick Stone who left on 31 July 2023.
The recruitment costs incurred of £0.2 million are not considered part of the trading performance of the business and so are
treated as specific items.
Unlawful dividend rectification
Following the identification of the payment of historic unlawful dividends, the Group incurred costs of £0.2 million in relation to
their rectification, which are not expected to recur, are not considered part of the trading performance of the business and so are
treated as specific items.
Commission obligation
In the prior year, as set out in Note 7.1 Provisions, the Group recognised a provision in relation to an uncertain commission obligation.
During the prior year, an amount of £0.3 million was recognised to increase the provision. Due to the nature of the provision being
an historical transaction and not related to current trading, the Group treated the cost as a specific item.
Impairment of financial asset
In the prior year, an impairment charge of £0.8 million was recognised in relation to a disputed staff loan with an ex-employee
of our Indian operations. Since no significant progress had been made with the ongoing legal case it is now the opinion of the
directors that recovery of this debt is unlikely. Due to the size of the impairment and the fact that the original debt arose several
years previously and is not related to trading, this impairment charge is not deemed to relate to the performance of the business
and as such was treated as a specific item.
Impairment of goodwill
In the prior year, an impairment of goodwill of £9.1 million was recognised in relation to the goodwill allocated to the Corporate
Finance business. The Group does not believe that this impairment reflected the performance of the business during the year,
and as such, was treated as a specific item.
Other operating costs
In the current year, operating costs includes the fair value loss on the revaluation of the Group’s investment in London Tanker
Brokers Panel. Consistent with the previous revaluation gain being included as a specific item, the Group has treated the current
year loss as a specific item as it does not relate to the trading performance of the business in the year. In the prior year, the final
transaction costs of £0.1 million related to disposals in the preceding year were received.
The tax income on specific items included within operating costs was £0.7 million (2023: £0.1 million).
Acquisition-related items
Consideration treated as an employment expense
Following the acquisition of Southport Maritime Inc. in December 2022, due to the requirement for ongoing employee service,
the upfront cash payment of £6.0 million and IFRS 2 charge related to share awards made to the sellers and existing employees
of Southport are treated as a post-combination remuneration expense. The total expense for the year related to amounts linked
to ongoing employee service in connection with the acquisition of Southport was £3.6 million (2022: £1.3 million). The period of
required employee service is three years from the acquisition date.
Madrid post-contractual obligation
As a result of the recruitment of a team of brokers based in Madrid, service agreements were entered into with employees.
The recruitment of the broker team in Madrid included the following key elements:
– The Group assumed a liability of £0.3 million for a post-contractual payment to the employees, which was fully vested on
signing the contracts.
– An upfront cash payment of £1.3 million with a further payment of £1.3 million made in December 2023.
– Share awards to a total value of £1.1 million which vest evenly in one, two and three years from December 2022.
The upfront payments and share awards have a clawback mechanism which is linked to the continued employment of the
brokers over a three-year period from December 2022. The costs associated with the upfront payments and share awards are not
considered by the Group to be specific items as they relate to the recruitment of brokers and not a business combination, but are
disclosed as acquisition-related expenditure given their size and will be amortised over three years to December 2025. In addition,
certain brokers are entitled to a payment on termination in return for a non-compete obligation. The cost related to the post-
contractual payment obligation is treated as a specific item because it is akin to a transaction cost with no requirement to provide
service. The Group recognised a cost of £0.4 million during the year in relation to this obligation (2023: £0.3 million).
Acquisition of Naves Corporate Finance GmbH
In the prior year, the Group incurred total costs of £0.1 million in relation to employment costs due to the management sellers
conditional on their ongoing service to the Group. As the service condition was satisfied in the prior year there is no further
employment cost to be recognised.
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
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Strategic Report Governance Financial Statements
Amortisation of acquired intangible assets
An amount of £0.4 million (2022: £0.4 million) relates to the amortisation of acquired intangible assets, primarily in relation to
intangible assets recognised as a result of the acquisition of Southport Inc.
The tax income on acquisition-related items was £0.1 million (2023: £0.1 million). The tax effect of expenses not deductible for tax
was £1 million.
Other specific items
Cory Brothers earnout deferred consideration receivable
The unwinding of the discounting of the deferred receivable due in respect of the Cory Brothers disposal contributed interest
income of £0.1 million (2023: £0.1 million). See Note 4.9 for further information. This income is not related to the trading of the
business in the period but is related to the disposal of the logistics business in a prior year. As a result, it is treated as specific item.
Foreign exchange and derivative movement on Naves liability
The foreign exchange gain and fair value gain on the Naves-related liabilities and derivative of £0.3 million (2023: £0.3 million loss)
is included as a specific item as it relates to the acquisition of Naves and is not related to trading.
The tax charge on specific items included within other items was £nil (2023: £0.2 million). The tax effect of income not taxable was
£0.2 million.
2.3 Operating profit from continuing operations
Operating profit represents the results from operations before finance income and costs, share of profit/(loss) in associate and taxation.
This is stated after charging/(crediting):
Notes
2024 2023
£’000 £’000
Staff costs
2.4
109,557
110,166
Other staff costs – acquisition related
2.4
3,239
1,470
Depreciation of property, plant and equipment
3.5
3,127
2,823
Amortisation of computer software intangible assets
3.2
229
192
Bad debt charge
4.2
697
238
Auditor’s remuneration
2.6
1,794
1,354
Other professional costs
5,627
3,410
Office costs
2,145
1,595
IT and communication costs
4,175
3,264
Insurance
1,083
1,069
Net foreign exchange losses/(gains)
1,118
(1,465)
2.4 Staff costs
a) Staff costs for the Group during the year (including directors)
Notes
2024 2023
£’000 £’000
Salaries, wages and short-term employee benefits
97,441
100,039
Other staff costs – acquisition related
2.2
3,239
1,470
Other pension costs
5.1
2,247
1,811
Social security costs
3,427
3,796
Share-based payments
6.3
6,442
4,520
Total
112,796
111,636
1
The acquisition related staff costs relate to upfront cash payments made in connection with the acquisition of Southport Maritime Inc. and the upfront
payments made on the acquisition of Madrid Shipping Advisors SL, which are both treated as a remuneration expense. For further details on the upfront
payments, see Note 2.2.
1
The numbers above include remuneration and pension entitlements for each director. Details are included in the Directors’
Remuneration Report on pages 62-78. The directors’ remuneration is borne by Braemar Plc.
Braemar Plc Annual Report and Accounts 2024
106
2 Performance related information continued
2.4 Staff costs continued
b) Average number of employees
2024 2023
number number
Chartering
266
253
Risk Advisory
31
32
Investment Advisory
49
63
Central
63
36
Total
409
384
c) Key management compensation
The remuneration of key management, which the Group considers to be the directors, is set out below. Further information about
the remuneration of individual directors is provided in the Directors’ Remuneration Report on pages 62-78.
2024 2023
£’000 £’000
Salaries, short-term employee benefits and fees
4,954
5,879
Other pension costs
85
52
Termination benefits
131
–
Share-based payments
548
1,226
Total
5,718
7,157
Pension costs relate to contributions made to a defined contribution pension scheme on behalf of four (2023: three) members of
key management.
2.5 Finance income and costs
The tables below provide a breakdown of the key components of finance income and finance costs.
Notes
2024 2023
£’000 £’000
Finance income:
– Interest on bank deposits
4.5
464
84
– Interest on lease receivables
3.6
16
35
– Interest income on the net defined benefit asset
5.1
85
–
– Gain on derivative instruments not eligible for hedge accounting
4.4
273
–
– Foreign exchange gain on non-GBP denominated credit facilities
4.6
33
–
– Gain on Naves related derivative instruments and liability
4.7
333
–
– Interest on of Cory earnout deferred consideration receivable
4.4
86
83
Total finance income
1,290
202
Finance costs:
– Interest payable on revolving credit and overdraft facilities
4.6
(2,407)
(1,151)
– Interest payable on defined benefit liability
5.1
–
(54)
– Loss on derivative instruments not eligible for hedge accounting
4.4
–
(292)
– Foreign exchange loss on non-GBP denominated credit facilities
4.6
–
(49)
– Loss on Naves related derivative instruments and foreign exchange loss on liability
4.7
–
(250)
– Interest payable on convertible loan notes
4.7
(227)
(426)
Subtotal finance costs before interest on lease liabilities
(2,634)
(2,222)
– Interest on lease liabilities
3.6
(189)
(175)
Total finance costs
(2,823)
(2,397)
Finance costs – net
(1,533)
(2,195)
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
107
Strategic Report Governance Financial Statements
2.6 Auditor’s remuneration
A more detailed analysis of the auditor’s services is provided below:
2024 2023
£’000 £’000
Audit services:
– Fees payable to the Company’s auditor for the audit of the Company’s Financial Statements
625
740
Fees payable to the Group’s auditor and its associates for other services:
– The audit of the Group’s subsidiaries pursuant to legislation
1,029
457
– Other services – interim review and reporting accountant services
140
157
1,794
1,354
All fees paid to the auditor were charged to operating profit in both years. Included in the FY24 audit fees disclosed above is
an amount of £0.4 million in relation to incremental audit cost related to the investigation work undertaken. See Note 2.2 for
further detail.
2.7 Taxation
The taxation expense represents the sum of the current and deferred tax.
Tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the Income Statement
because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that
are never taxable or deductible. The Group and Company’s liability for current tax is calculated using rates that have been enacted
or substantively enacted by the Balance Sheet date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated Financial Statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from the
initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction,
affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the
reporting period and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax
liability is settled. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets
and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are
offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
Current and deferred tax are recognised in the Income Statement, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.
a) Analysis of charge in year
2024 2023
£’000 £’000
Current tax
UK corporation tax charged to the Income Statement
1,015
1,194
UK adjustment in respect of previous years
(340)
–
Overseas tax on profits in the year
2,668
4,559
Overseas adjustment in respect of previous years
(425)
394
Total current tax
2,918
6,147
Deferred tax
UK current year origination and reversal of temporary differences
(97)
(190)
Due to change in rate of tax
(2)
–
UK adjustment in respect of previous years
(28)
(242)
Overseas current year origination and reversal of temporary differences
110
(712)
Overseas adjustment in respect of previous years
(2)
(148)
Total deferred tax
(19)
(1,292)
Taxation
2,899
4,855
Braemar Plc Annual Report and Accounts 2024
108
2 Performance related information continued
2.7 Taxation continued
a) Analysis of charge in year continued
Reconciliation between expected and actual tax charge
2024 2023
£’000 £’000
Profit before tax from continuing operations
7,523
9,451
Profit before tax at standard rate of UK corporation tax of 24.49% (2023: 19%)
1,842
1,796
Utilisation of deferred tax asset at lower effective tax rate
(2)
22
Net expenses not deductible for tax purposes
1,827
1,580
Utilisation of previously unrecognised losses
(36)
(104)
Tax on overseas branch
115
672
Tax calculated at domestic rates applicable to profits in overseas subsidiaries
(565)
758
Other differences leading to a decrease in tax
–
(365)
Share scheme movements
446
316
Unrecognised deferred tax on losses
67
176
Prior year adjustments
(795)
4
Total tax charge for the year
2,899
4,855
2
1
1 Included within the prior year adjustment, a £0.5 million credit arose in the UK as a result of a foreign tax credit claim. In addition, in the prior year, as part of the
Group’s estimate in relation to uncertain tax positions, the Group had applied a tax rate of 17% in Singapore, but after meeting the qualifying criteria a rate of
10.5% is applicable which has resulted in a credit of £0.4 million in the current year.
2 The Group has £0.2 million of unrecognised deferred tax asset relating to £0.8 million of losses. The expiry date of operating losses carried forward is
dependent upon the law of the various territories in which losses arise. As at 29 February 2024 the losses have no expiry. The prior year amount was incorrectly
reported as a decrease of £0.2 million but has been updated in the current year with the offsetting movement included in other differences leading to a
decrease in tax.
Included within the total tax charge is £0.8 million credit (2023: £0.2 million) in respect of specific items disclosed separately on the
face of the Income Statement. See Note 2.2.
The Group’s future tax charge will be sensitive to the geographic mix of profits earned; the tax rates in force and changes to the
tax rules in jurisdictions that the Group operates in. The UK main rate increased to 25% from 1 April 2023. The impact of UK rate
changes on deferred tax were taken into account in the prior year.
b) Amounts recognised in OCI
2024 2023
£’000 £’000
Items that will not be reclassified to profit or loss
Actuarial gain in respect of defined benefit pension scheme
173
2,775
Deferred tax charge on defined benefit pension scheme
–
(414)
Sub-total
173
2,361
Items that will be reclassified to profit or loss
Cash flow hedge
1,641
388
Deferred tax charge on cash flow hedge
(410)
(97)
Sub-total
1,231
291
Total tax recognised in OCI
(410)
(511)
Total amounts recognised in OCI
1,404
2,652
Within the UK current year origination and reversal of temporary differences there is no amount (2023: £414,000 debit) in respect of
deferred tax on the actuarial gain on the Group’s defined benefit pension scheme .
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
109
Strategic Report Governance Financial Statements
c) Deferred tax asset
Accelerated
capital Trading Other Employee
Deferred Tax Asset allowances
losses
Bonuses
provisions
benefits
Total
At 1 March 2022
(48)
248
713
913
1,887
3,713
(Charge)/credit to Income Statement
48
(248)
710
219
–
729
Charge to Other Comprehensive Income
–
–
–
(511)
–
(511)
Credit to equity
–
–
–
–
863
863
At 28 February 2023
–
–
1,423
621
2,750
4,794
(Charge)/credit to Income Statement
86
215
(502)
(116)
–
(317)
Charge to Other Comprehensive Income
–
–
–
(410)
–
(410)
Charge to equity
–
–
–
–
(1,047)
(1,047)
Exchange translation differences
–
–
(66)
25
–
(41)
At 29 February 2024
86
215
855
120
1,703
2,979
The movement in the net deferred tax asset
2024 2023
£’000 £’000
Balance at beginning of year
4,450
3,713
Movement to Income Statement:
Adjustments in respect of prior years
30
390
Arising on pension costs
–
99
Arising on bonuses
(502)
632
Arising on other
491
170
Total movement to Income Statement
19
1,291
Balance arising on business combinations
–
(906)
Movement to other comprehensive income:
Related deferred tax asset
(410)
(511)
Exchange translation differences
(41)
–
Movement to equity
(1,047)
863
Total movement to equity and other comprehensive income
(1,498)
352
Balance at end of year
2,971
4,450
A deferred tax asset of £2.9 million (2023: £4.8 million) has been recognised as the directors believe that it is probable that there
will be sufficient taxable profits in the future to recover the asset in full.
Braemar Plc Annual Report and Accounts 2024
110
2 Performance related information continued
2.7 Taxation continued
d) Deferred tax liability
Analysis of the deferred tax liabilities
As at As at
29 Feb 2024 28 Feb 2023
£’000 £’000
Temporary differences
(8)
(344)
Balance at end of year
(8)
(344)
The movement in the deferred tax liability
As at As at
29 Feb 2024 28 Feb 2023
£’000 £’000
Balance at beginning of year
(344)
–
Balance arising on business combinations
–
(906)
Current year origination and reversal of temporary differences
336
562
Balance at end of year
(8)
(344)
No deferred tax has been provided in respect of temporary differences associated with investments in subsidiaries and interests in
joint ventures where the Group is in a position to control the timing of the reversal of the temporary differences and it is probable
that such differences will not reverse in the foreseeable future. The aggregate amount of temporary differences associated with
investments in subsidiaries, for which a deferred tax liability has not been recognised, is approximately £nil (2023: £nil).
2.8 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 ordinary shares held by the Employee Share Ownership Plan
and ordinary shares held by the ACM Employee Benefit Trust which are not treated as outstanding.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The Group has dilutive ordinary shares, being those options granted to employees where the
expected consideration is less than the average market price of the Company’s ordinary shares during the period that they are
outstanding, and convertible loan notes issued in respect of the acquisition of Naves.
Total operations
2024 2023
£’000 £’000
Profit for the year attributable to shareholders
4,624
4,596
Pence
Pence
Basic earnings per share
15.65
15.85
Effect of dilutive share options
(2.85)
(2.60)
Diluted earnings per share
12.80
13.25
Underlying operations
2024 2023
£’000 £’000
Underlying profit for the year attributable to shareholders
10,820
13,399
Pence
Pence
Basic earnings per share
36.62
46.22
Effect of dilutive share options
(6.66)
( 7.70)
Diluted earnings per share
29.96
38.52
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
111
Strategic Report Governance Financial Statements
A reconciliation by class of instrument in relation to potential dilutive ordinary shares and their impact on earnings is set out below:
2024
2023
Weighted Weighted
average Underlying Statutory average Underlying Statutory
number of earnings earnings number of earnings earnings
shares £’000 £’000 shares £’000 £’000
Used in basic earnings per share
29,547,810
10,820
4,624
28,990,885
13,399
4,596
RSP, DBP and LTIP
6,565,016
–
–
5,428,815
–
–
Options (SAYE)
–
–
–
216,764
–
–
Convertible loan notes
–
–
–
201,118
20
20
Used in diluted earnings per share
36,112,826
10,820
4,624
34,837,582
13,419
4,616
3 Balance sheet non-current assets
3.1 Goodwill
Business combinations are accounted for using the acquisition method. The goodwill recognised as an asset by the Group is
stated at cost less any accumulated impairment losses.
On the acquisition of a business, fair values are attributed to the net assets (including any identifiable intangible assets) acquired.
The excess of the consideration transferred, any non-controlling interest recognised and the fair value of any previous equity
interest in the acquired entity over the fair value of net identifiable assets acquired is recorded as goodwill. Acquisition-related
costs are recognised in the Income Statement as incurred in accordance with IFRS 3.
In relation to acquisitions where the fair value of assets acquired exceeds the fair value of the consideration, the excess fair value
is recognised immediately in the Income Statement as a gain on purchase.
On the disposal of a business, goodwill relating to that business remaining on the Balance Sheet is included in the determination
of the profit or loss on disposal. As permitted by IFRS 1, goodwill on acquisitions arising prior to 1 March 2004 has been retained
at prior amounts and is tested annually for impairment.
Key estimate
Impairment of goodwill
Goodwill is tested for impairment on an annual basis, and the Group will also test for impairment at other times if there is an
indication that an impairment may exist. Determining whether goodwill is impaired requires an estimation of the value-in-use
of the cash-generating units to which these assets have been allocated. The value-in-use calculation estimates the present
value of future cash flows expected to arise for the cash-generating units. The key estimates are therefore the selection of
suitable discount rates and the estimation of future growth rates which vary between cash-generating units depending on the
specific risks and the anticipated economic and market conditions related to each cash-generating unit.
As part of determining the value in use of each CGU group, Management has considered the potential impact of climate
change on the business performance over the next five years, and the terminal growth rates. While there is considerable
uncertainty relating to the longer term and quantifying the impact on a range of outcomes, management considers that
environmental-related incremental costs are expected to have a relatively low impact. Recognising that there are extreme but
unlikely scenarios, the Group considers that while exposed to physical risks associated with climate change (such as flooding,
heatwaves, sea level rises and increased precipitation) the estimated impact of these on the Group is not deemed material.
In addition, the Group is exposed to transitional risks which might arise, for example, from government policy, customer
expectations, material costs and increased stakeholder concern. The transitional risks could result in financial impacts such
as higher environmentally focused levies (e.g. carbon pricing). While the Group is exposed to the potential financial impacts
associated with transitional risks, based on information currently available, these are not deemed to have a significant impact.
The key assumptions and the sensitivity of them to the carrying values are provided in the note below.
Braemar Plc Annual Report and Accounts 2024
112
3 Balance sheet non-current assets continued
3.1 Goodwill continued
£’000
Cost
At 28 February 2022
87,5 50
Exchange adjustments
566
At 28 February 2023
88,116
Exchange adjustments
(300)
At 29 February 2024
87,816
Accumulated impairment
At 28 February 2022
7,659
Impairment charge recognised in the year
9,050
At 28 February 2023
16,709
Exchange adjustments
(230)
At 29 February 2024
16,479
Net book value at 29 February 2024
71,337
Net book value at 28 February 2023
71,407
All goodwill is allocated to cash-generating units. The allocation of goodwill to groups of cash-generating units is as follows:
2024 2023
£’000 £’000
Chartering
68,696
68,696
Corporate Finance (part of Investment Advisory segment)
2,641
2,711
71,337
71,407
These groups of cash-generating units represent the lowest level within the Group at which goodwill is monitored for internal
management purposes.
All goodwill is denominated in the Group’s reporting currency, with the exception of the Corporate Finance Division which
is denominated in euros. Goodwill denominated in foreign currencies is revalued at the Balance Sheet date. The exchange
adjustment at 29 February 2024 was a loss of £0.1 million (2023: gain of £0.6 million).
The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is
determined based on value-in-use calculations. The use of this method requires the estimation of future cash flows and the
determination of a discount rate in order to calculate the present value of the cash flows.
The key assumptions on which the value-in-use calculations are based relate to (i) business performance over the next five years,
(ii) long-term growth rates beyond 2029 and (iii) discount rates applied.
i) Business performance over the next five years – The estimated cash flows were based on the approved annual budget for
the next financial year and projections for the following four years which are based on management’s estimates of revenue
growth and cost inflation which reflect past experience and management’s expectation of future events given the specific risks
and economic and market conditions of each cash-generating unit. The assumptions behind these projections are consistent
with the viability statement. Cash flows have been used over a period of five years as management believes this reflects a
reasonable time horizon for management to monitor the trends in the business.
ii) Long-term growth rates – This is the average growth rate used to extrapolate cash flows beyond the budget period.
iii) Discount rates – The post-tax discount rate was determined based on a weighted average cost of capital (“WACC”) and
adjusted for CGU-specific risk factors specific to the CGU group.
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
113
Strategic Report Governance Financial Statements
The results of the impairment tests are as follows:
a) Chartering
The key assumptions and resulting net present values are as follows:
Chartering 2024
2023
Post-tax discount rate
11.86%
13.04%
Equivalent pre-tax discount rate
12.40%
16.47%
Average revenue growth rate years 2-5
3.0%
3.5%
Operating profit margin years 1-5
13.8% – 14.4%
15.0 – 15.4%
Long-term growth rate
1.7%
1.7%
1
1 No year-on-year revenue growth is assumed in year one.
At 29 February 2024, the net present value of the Chartering segment is significantly higher than the carrying value of the goodwill
in respect of this cash-generating unit. At the Balance Sheet date, management concluded that there were no reasonably possible
changes in the key assumptions used in the impairment review that would reduce headroom to £nil or result in an impairment.
b) Corporate Finance
Revenues for the Corporate Finance Division are challenging to forecast because of the highly variable nature of success fees.
Management forecasts over the five year forecast period consider recent performance and reflect management’s best estimate of
success fee taken into account of volatility of the success fee. Growth rates used in the value-in-use test reflect this variability and
were based on the best estimate of the Management.
Corporate Finance 2024
2023
Post-tax discount rate
13.84%
14.82%
Equivalent pre-tax discount rate
14.45%
20.66%
Average revenue growth rate years 2-5
5.0%
5.0%
Operating profit margin years 1-5
12.3% – 15.9%
11.6% – 14.4%
Long-term growth rate
1.7%
1.7%
1
1 Year-on-year growth in year 1 is 29%, which reflects recovery of revenue after lower than historically achieved performance in FY24.
Sensitivity to impairment for Corporate Finance
To test the sensitivity of the results of the impairment review, the calculations have been re-performed, flexing the three
key assumptions:
– revenue growth rate from year two to five;
– post-tax discount rate; and
– revenue outperforms or underperforms forecast in year one with subsequent revenue growth in line with the above
assumptions in years two to five.
The recoverable amount of the Group’s goodwill relating to Corporate Finance exceeds its carrying value by £0.6 million. The below
table presents the net variance in the calculated value in use of Corporate Finance under each scenario:
Change in Change in post-tax Year 1 revenue outperforms
revenue growth discount rate or underperforms forecast
+1% -1% +2% -2% +15% -15%
£’000 £’000 £’000 £’000 £’000 £’000
Corporate Finance
318
(310)
(456)
637
1,438
(1,438)
Further, the break-even points of the impairment review which would result in an impairment when flexing these three key
assumptions are as below:
Change in
assumption
Increase/
(decrease)
Revenue growth rate from year 2 to 5
(1.8%)
Post-tax discount rate
2.5%
Revenue underperforms forecast in year 1
(5.8%)
Braemar Plc Annual Report and Accounts 2024
114
3 Balance sheet non-current assets continued
3.1 Goodwill continued
b) Corporate Finance continued
The effect on cash flows of climate change was considered but assessed to have no material impact at this time. Management
does not believe that climate-related risks nor the potential impact of climate change on the Group’s operations would materially
affect the recoverability of goodwill in either of the cash-generating units (see Note 3.1).
3.2 Other intangible assets
Computer software
The Group capitalises computer software at cost. It is amortised on a straight-line basis over its estimated useful life of up
to four years.
Other intangible assets
Intangible assets acquired as part of a business combination are stated in the Balance Sheet at their fair value at the date
of acquisition less accumulated amortisation and any provision for impairment. The amortisation of the carrying value of the
capitalised forward order book and customer relationships is charged to the Income Statement over an estimated useful life,
which is between four months to twelve years. The amortisation in respect of capitalised brand assets is expensed to the Income
Statement over an estimated useful life, which is between three and twelve years.
Other
Computer intangible
software assets Total
£’000 £’000 £’000
Cost
At 28 February 2022 (restated)
1
5,586
1,040
6,626
Additions
90
–
90
Business combination
–
3,545
3,545
Disposals
(87)
–
(87)
Exchange rate adjustments
5
33
38
At 28 February 2023
5,594
4,618
10,212
Additions
32
–
32
Disposals
–
(245)
(245)
Exchange rate adjustments
(3)
(171)
(174)
At 29 February 2024
5,623
4,202
9,825
Amortisation
At 28 February 2022 (restated)
1
4,845
784
5,629
Charge for the year
192
349
541
Impairment
60
–
60
Exchange adjustments
1
1
2
At 28 February 2023
5,098
1,134
6,232
Charge for the year
229
449
678
Impairment
–
–
–
Disposal
–
(245)
(245)
Exchange adjustments
(1)
(24)
(25)
At 29 February 2024
5,326
1,314
6,640
Net book value at 29 February 2024
297
2,888
3,185
Net book value at 28 February 2023
496
3,484
3,980
1 The gross cost and gross accumulated amortisation of other intangible assets at 28 February 2022 included fully amortised acquired order books relating to
historical business combinations. The Group believes that once all orders in the order book have been satisfied and revenue recognised, there is no further
asset to benefit from. For order books satisfied at 28 February 2022 the Group has restated the opening gross cost and gross accumulated amortisation to
correct the opening gross positions in relation to other intangible assets. The impact of the restatement is a reduction of £8.5 million to the gross cost and
gross accumulated amortisation at 28 February 2022, with no impact to net book values or amortisation expense in the current or prior year.
Other intangible assets brought forward from the prior year relate to forward books of income acquired in acquisitions which are
amortised over the period that the income is recognised; customer relationships which are amortised over a period of up to twelve
years; and brand which is amortised over a period of up to ten years .
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
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Strategic Report Governance Financial Statements
The addition of £3.5 million in the prior year related to the acquisition of Southport, which gave rise to customer-related intangible
assets of £3.1 million (including customer relationships of £2.8 million and order backlog of £0.3 million) and an asset of £0.4 million
in relation to the trade name. The amortisation period for customer relationships is twelve years, order backlog is four months, and
trade name is five years.
The customer relationships and order backlog were valued using an excess earnings method. Under the excess earnings method,
a stream of revenue and expenses are identified as those associated with a particular group of assets. This group of assets
includes the subject intangible asset as well as other assets (contributory assets) that are necessary to support the earnings
associated with the subject intangible asset. By identifying and subtracting contributory assets, the residual earnings are estimated
to be attributable to the subject intangible asset and are discounted to present value at an appropriate discount rate (estimated
at 19%). The trade name was valued using a royalty savings method. The royalty savings method is a derivation of the income
approach often used to value intangible property that may be licensed to third parties. Under this method, it is assumed that a
company, without a similar asset, would license the right to use this intangible asset and pay a royalty related to turnover achieved.
The value of the asset is established by calculating the present value of the royalty stream (estimated at 4%) that the business is
saving by owning the asset.
At 29 February 2024, the Group had no contractual commitments for the acquisition of computer software or other intangible
assets (2023: £nil).
3.3 Investments
In accordance with IFRS 9, the Group’s investments in unlisted equity investments are measured at fair value through profit or loss
as the Group has not elected to recognise fair value gains and losses through other comprehensive income.
2024 2023
£’000 £’000
Unlisted investments
1,633
1,780
Movement in unlisted investments £’000
£’000
Opening balance
1,780
1,780
Fair value loss
(147)
–
Closing balance
1,633
1,780
A list of subsidiary undertakings is included in Note 7.3.
The Financial Statements of the principal subsidiary undertakings are prepared to 29 February 2024.
The Group’s unlisted investments include 1,000 (2023: 1,000) ordinary £1 shares in London Tanker’s Broker Panel Limited. The
investment is carried at fair value of £1.6 million, see Note 4.4 for further details.
3.4 Investment in associate
Investments
Investments in associates and joint ventures where the Group has joint control or significant influence are accounted for under
the equity method. Investments in associates are initially recognised in the Consolidated Balance Sheet at cost. Subsequently,
associates are accounted for under the equity method, where the Group’s share of post-acquisition profits and losses and other
comprehensive income is recognised in the Income Statement and Statement of Comprehensive Income.
Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of unrelated
investors’ interests in the associate. The investor’s share in the associate’s profits and losses arising from these transactions is
eliminated against the carrying value of the associate.
Where the Group’s share of the associate’s identifiable net assets is greater than the cost of investment, a gain on purchase is
recognised in the Income Statement and the carrying value of the investment in the Consolidated Balance Sheet is increased.
When the Group disposes of shares in associates or joint ventures, the Group recognises a profit or loss on disposal based on
the net proceeds less the weighted average cost of the shares disposed of. On disposal, the Group reclassifies foreign exchange
amounts previously recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss
would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
The most recent Financial Statements of an associate are used for accounting purposes unless it is impractical to do so. Where
the Group and an associate have non-coterminous reporting dates, the associate’s full-year accounts will be used for the
purposes of the Group’s reporting at 29 February with adjustments made for any significant transactions or events.
Investments where the Group has no significant influence are held at fair value, with movements in fair value recorded in profit and loss.
Braemar Plc Annual Report and Accounts 2024
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3 Balance sheet non-current assets continued
3.4 Investment in associate continued
Investments continued
Zuma Labs Limited
Zuma Labs Limited is a private company incorporated in England and Wales and its registered address is Kemp House, 128 City
Road, London, United Kingdom, EC1V 2NX. Zuma Labs Limited has one share class and each share carries one vote.
At 29 February 2024, the Group’s shareholding was 2,500 shares, which equates to 20.0% of Zuma Labs Limited’s share capital
and 20.0% of voting rights (2023: 2,500 shares, 20% of share capital and 20% of voting rights). The Group has representation on
the board of Zuma Labs Limited, and, as a result, the Group considers that it has the power to exercise significant influence in
Zuma Labs Limited and the investment in it has been accounted for using the equity method.
A purchase price allocation exercise was undertaken to measure the fair value of the net assets on the date at which Zuma Labs
Limited became an associate, and also at each date at which further shares were subscribed for. Based on the purchase price
allocation exercise, the difference between the cost of the investment and the Group’s share of the net fair value of Zuma Labs
Limited’s identifiable assets and liabilities is accounted for as goodwill. Amortisation of that goodwill is not permitted.
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. Zuma Labs Limited has a year-end of 31 March and accounts up to
31 December 2023 have been made available, so for practical reasons Zuma Labs Limited’s management accounts for the nine
months ended 31 December 2023 will be used for the purposes of the Group’s full-year reporting at 29 February with adjustments
made for any significant transactions and events. Zuma Labs Limited will prepare its next set of Financial Statements for the year
ended 31 March 2024. At 29 February 2024 Zuma Labs Limited had no contingent liabilities.
Management has reviewed the carrying value of the investment in Zuma Labs Limited at 29 February 2024 and does not consider
this to be impaired.
The movements in the investment in associates are provided below.
Zuma
£’000
At 28 February 2022
724
Share of loss in associate
(23)
At 28 February 2023
701
Share of profit in associate
12
At 29 February 2024
713
Notes to the Financial Statements continued
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Strategic Report Governance Financial Statements
3.5 Property, plant and equipment
Property, plant and equipment are shown at historical cost less accumulated depreciation and any provision for impairment.
Depreciation is provided at rates calculated to write off the cost, less estimated residual value of each asset, on a straight-line basis
over its expected useful life as follows (except for long and short leasehold interests which are written off against the remaining
period of the lease):
Computer equipment – four years
Fixtures and equipment – four years
Land and
buildings
£’000
Computers
£’000
Fixtures and
equipment Total
£’000 £’000
Cost
At 28 February 2022
14,407
1,599
1,878
17,884
Additions at cost
757
374
334
1,465
Business combination
86
–
80
166
Disposals
(2,445)
(4)
(369)
(2,818)
Exchange differences
427
41
88
556
At 28 February 2023
13,232
2,010
2,011
17,253
Additions at cost
3,052
240
281
3,573
Disposals
(3)
(101)
(45)
(149)
Exchange differences
(279)
(28)
(55)
(362)
At 29 February 2024
16,002
2,121
2,192
20,315
Accumulated depreciation
At 28 February 2022
8,199
1,061
1,546
10,806
Charge for the year
2,477
171
175
2,823
Disposals
(1,852)
(1)
(313)
(2,166)
Impairment
–
150
–
150
Exchange differences
234
25
61
320
At 28 February 2023
9,058
1,406
1,469
11,933
Charge for the year
2,662
246
219
3,127
Reclassification
(6)
–
6
–
Disposals
(3)
(91)
(45)
(139)
Exchange differences
(126)
(21)
(41)
(188)
At 29 February 2024
11,585
1,540
1,608
14,733
Net book value at 29 February 2024
4,417
581
584
5,582
Net book value at 28 February 2023
4,174
604
542
5,320
At 29 February 2024, the Group had no contractual commitments for the acquisition of property, plant and equipment (2023: £nil).
Braemar Plc Annual Report and Accounts 2024
118
3 Balance sheet non-current assets continued
3.6 Leases
The Group as a lessee
The Group has various lease arrangements for properties, and other equipment. At inception of a lease contract, the Group
assesses whether the contract conveys the right to control the use of an identified asset for a certain period of time and whether
it obtains substantially all the economic benefits from the use of that asset, in exchange for consideration. The Group recognises a
lease liability and a corresponding right-of-use asset with respect to all lease arrangements in which it is a lessee, except low-value
leases and short-term leases of twelve months or less, costs for which are recognised as an operating expense within the Income
Statement on a straight-line basis.
A right-of-use asset is capitalised on the Balance Sheet at cost, comprising the amount of the initial measurement of the lease
liability and lease payments made at or before the commencement date, plus any initial direct costs incurred in addition to an
estimate of costs to remove or restore the underlying asset. Where a lease incentive is receivable, the amount is offset against
the right-of-use asset at inception. Right-of-use assets are depreciated using the straight-line method over the shorter of the
estimated life of the asset or the lease term.
The lease liability is initially measured at the present value of future lease payments. Interest expense is charged to the
Consolidated Income Statement over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. Generally, the
interest rate implicit in the lease is not readily determinable, as such the incremental borrowing rate is used to discount future
lease payments.
For the Group, lease payments generally comprise the following:
– Fixed payments, less any lease incentives receivable;
– Variable payments that are based on an index or rate; and
– Payments to be made under extension options which are reasonably certain to be exercised.
Lease payments made are apportioned between an interest charge and a capital repayment amount which are disclosed within
the financing activities and the operating activities sections of the Consolidated Statement of Cash Flows respectively. When an
adjustment to lease payments based on an index takes effect, the liability is remeasured with a corresponding adjustment to the
right-of-use asset.
Contracts entered into by the Group have a wide range of terms and conditions but generally do not impose any additional
covenants. Several of the Group’s contracts include indexation adjustments to lease payments in future periods which are not
reflected in the measurement of the lease liabilities at 29 February 2024. Many of the contracts entered into by the Group include
extension or termination options which provide the Group with additional operational flexibility. If the Group considers it reasonably
certain that an extension option will be exercised or a termination option not exercised, the additional period is included in the
lease term.
A modification to a lease which changes the lease payment amount (e.g. due to a renegotiation or market rent review) or amends
the term of the lease, results in a reassessment of the lease liability with a corresponding adjustment to the right-of-use asset.
The Group as a lessor
The Group classifies leases as either operating or finance leases based on the substance of the arrangement. At commencement
of a finance lease, a receivable is recognised at an amount equal to the Group’s net investment in the lease. Finance income is
recognised reflecting a constant periodic rate of return on the net investment in the lease. Lease payments from operating leases
are recognised as income on a straight-line basis.
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
119
Strategic Report Governance Financial Statements
Right-of-use assets
The Group leases a number of properties in the jurisdictions from which it operates. In some jurisdictions it is customary for lease
contracts to provide for payments to increase each year by inflation and in other property leases the periodic rent is fixed over
the lease term. The Group also leases certain items of plant and equipment which are typically motor vehicles. These contracts
normally comprise only fixed payments over the lease term.
Land and Fixtures and
buildings equipment Total
£’000 £’000 £’000
At 28 February 2022
5,182
12
5,194
Additions
711
59
770
Business combination
86
–
86
Depreciation
(2,079)
(8)
(2,087)
Disposals
(481)
(10)
(491)
Exchange differences
166
1
167
At 28 February 2023
3,585
54
3,639
Additions
2,898
172
3,070
Reclassification
6
(6)
–
Depreciation
(2,249)
(71)
(2,320)
Exchange differences
(145)
(1)
(146)
At 29 February 2024
4,095
148
4,243
Lease liabilities
Total
£’000
At 28 February 2022
8,506
Additions
770
Business combination
86
Disposal
(632)
Interest expense
175
Lease payments
(4,039)
Exchange differences
161
At 28 February 2023
5,027
Additions
3,021
Interest expense
189
Lease payments
(3,332)
Exchange differences
(127)
At 29 February 2024
4,778
In the prior year, right-of-use assets and lease liabilities arising on business combinations represents leases on property of
£86,000. The total cash outflow for leases is £3,332,000 (2023: £4,039,000), of which £189,000 (2023: £175,000) represents
payment of interest.
Braemar Plc Annual Report and Accounts 2024
120
3 Balance sheet non-current assets continued
3.6 Leases continued
Lease receivables
Gross Provision Net
£’000 £’000 £’000
At 28 February 2022
1,512
(18)
1,494
Disposal
(39)
–
(39)
Interest income
35
–
35
Lease payments
(642)
–
(642)
Movement in provision
–
6
6
At 28 February 2023
866
(12)
854
Interest income
16
–
16
Lease payments
(642)
–
(642)
Movement in provision
–
12
12
At 29 February 2024
240
–
240
2024 2023
£’000 £’000
Short-term lease expense
(222)
(217)
Short-term lease income
102
91
Lease liabilities
Contractual payments by maturity are provided in Note 4.4 (f).
Lease receivables
Contractual receipts by maturity are provided in the table below:
Within 1 to 2 2 to 5 More than Unearned Net
1 year years years 5 years Total interest Provision receivable
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 29 February 2024
241
–
–
–
241
(1)
–
240
At 28 February 2023
642
241
–
–
883
(17)
(12)
854
During the year, the financial effect of revising lease terms arising from the effect of exercising extension and termination options
was an increase of £375,000 (2023: increase of £98,000) in the recognised lease liabilities. As at 29 February 2024, undiscounted
potential future cash outflows of £2.9 million (2023: £3.9 million) have not been included in the lease liability because it is not
reasonably certain that the leases will be extended (or not terminated).
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
121
Strategic Report Governance Financial Statements
4 Balance sheet – Operating assets and liabilities
4.1 Other long-term receivables
For the accounting policy and further details on deferred and contingent consideration receivable, see Note 4.9. The accounting
policy for finance lease receivables is set out in Note 3.6.
2024 2023
£’000 £’000
Deferred consideration
1,304
2,540
Contingent consideration
532
1,004
Security deposits
304
16
Finance lease receivables
–
228
Prepayments
2,449
4,766
4,589
8,554
Deferred consideration of £1.3 million and contingent consideration of £0.5 million relates to the earnout payments receivable
in respect of the disposal of Cory Brothers, further detail is provided in Note 4.9. Prepayments includes an asset of £2.4 million
(2023: £4.8 million) which is the non-current element of the clawback provision on joining incentives paid to certain employees.
The receivable is amortised over the clawback period.
See Note 3.6 for a maturity analysis which reconciles the long-term finance lease receivables to the undiscounted lease receipts
and unearned finance income.
4.2 Trade and other receivables
Trade receivables and contract assets
Trade receivables and contract assets are initially recognised at fair value (less transaction costs) and subsequently measured at
amortised cost.
At the Balance Sheet date, there may be amounts where invoices have not been raised but performance obligations have been
satisfied, and these are recognised as contract assets.
Specific provision is made where there is evidence that the balances will not be recovered in full. A provision for expected credit
losses is made for trade receivables and contract assets using the simplified approach. A provision matrix is used to calculate an
expected credit loss as a percentage of carrying value by age. The percentages are determined based on historical credit loss
experience as well as forward-looking information. Expected credit loss provisions are made for other receivables based on lifetime
expected credit losses using a model that considers forward-looking information and significant increases in credit risk.
Trade and other receivables are non-interest bearing and generally on terms payable within 30 to 90 days.
Other items
For the accounting policy and further details on deferred and contingent consideration receivable, see Note 4.9. The accounting
policy for finance lease receivables is set out in Note 3.6.
Key estimate
Provision for impairment of trade receivables and contract assets
Trade receivables and contract assets are amounts due from customers in the ordinary course of business. Trade receivables
and contract assets are classified as current assets if collection is due within one year or less (or in the normal operating cycle
of the business if longer). If not, they are presented as non-current assets.
The provision for impairment of trade receivables and contract assets represents management’s best estimate at the
Balance Sheet date. A number of judgements are made in the calculation of the provision, primarily the age of the invoice, the
existence of any disputes, recent historical payment patterns and the debtor’s financial position.
When measuring expected credit losses, the Group uses reasonable and supportable forward-looking information, which is
based on assumptions for the future movement of different economic drivers and how these drivers will affect each other.
Probability of default constitutes a key input in measuring expected credit losses. Probability of default is an estimate of the
likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations
of future market conditions. The expected loss rates applied to receivables are provided in this note.
Braemar Plc Annual Report and Accounts 2024
122
4 Balance sheet – Operating assets and liabilities continued
4.2 Trade and other receivables continued
2024 2023
£’000 £’000
Trade receivables
26,964
31,989
Provision for impairment of trade receivables
(2,837)
(3,725)
Net trade receivables
24,127
28,264
Deferred consideration
1,316
1,097
Contingent consideration
550
403
Other receivables
3,949
4,148
Finance lease receivables
240
626
Contract assets
1,517
3,388
Prepayments
6,031
5,397
Total
37,730
43,323
Deferred consideration of £1.3 million and contingent consideration of £0.6 million relate to the earnout payments receivable in
respect of the disposal of Cory Brothers; further detail is provided in Note 4.9.
Included in other receivables in both years are VAT and other sales tax receivables and employee loans. In the prior year, security
deposits are also included.
Prepayments includes an asset of £3.5 million (2023: £4.0 million) in respect of the current portion of the clawback provision on
joining incentives paid to certain employees which are being charged to the Income Statement in accordance with the clawback
provisions of the underlying contracts. The receivable is amortised over the clawback period.
The movement in the asset between years is due to the invoicing of all prior year assets and the accrual of amounts relating to the
current year.
The total receivables balance is denominated in the following currencies:
2024 2023
£’000 £’000
US dollars
28,690
35,888
Sterling
6,675
6,114
Other
2,365
1,321
Total
37,730
43,323
The directors consider that the carrying amounts of trade receivables approximate to their fair value.
Trade receivables are non-interest bearing and are generally on terms payable within 30–90 days; terms associated with the
settlement of the Group’s trade receivables vary across the Group. Specific debts are provided for where recovery is deemed
uncertain, which will be assessed on a case-by-case basis whenever debts are older than the due date, but always when debts
are older than usual for the industry in which each business in the Group operates.
As at 29 February 2024, trade receivables of £2,339,000 (2023: £3,003,000) which were over 12 months old were treated as credit
impaired and have been provided for. No provision (2023: £nil) has been made for specific trade receivables which are less than
12 months overdue.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss
provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables and
contract assets are grouped based on similar credit risk and ageing. The contract assets have similar risk characteristics to the
trade receivables for similar types of contracts.
The expected loss rates are based on the Group’s historical credit losses and rates are then adjusted for current and forward-
looking information on macroeconomic factors affecting the Group’s customers. Trade receivables and contract assets are written
off where there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include,
amongst others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual payments
for a period of greater than 365 days past due.
Notes to the Financial Statements continued
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Strategic Report Governance Financial Statements
The ageing profile of trade receivables and the lifetime expected credit loss for provisions and contract assets is as follows:
2024
Total
provision for
impairment
Trade Expected Group ECL of trade
receivables loss rate provision provision receivables
£’000 % £’000 £’000 £’000
Up to 3 months
18,685
0.015
–
282
282
3 to 6 months
3,922
0.024
–
96
96
6 to 12 months
1,905
0.052
–
98
98
Over 12 months
2,452
0.954
2,286
53
2,339
Trade receivables
26,964
0.104
2,286
529
2,815
Contract assets
1,517
0.014
–
22
22
Total
28,481
0.100
2,286
551
2,837
2023
Total
provision for
impairment
Trade Expected Group ECL of trade
receivables loss rate provision provision receivables
£’000 % £’000 £’000 £’000
Up to 3 months
23,556
0.015
–
333
333
3 to 6 months
3,185
0.020
–
71
71
6 to 12 months
2,078
0.051
–
149
149
Over 12 months
3,170
0.591
3,033
99
3,132
Trade receivables
31,989
0.096
3,033
652
3,685
Contract assets
3,388
0.012
–
40
40
Total
35,377
0.020
3,033
692
3,725
Movements on the provision for impairment of trade receivables and contract assets were as follows:
2024 2023
£’000 £’000
At 1 March
3,725
3,159
Bad debt charge
697
238
Receivables written off during the year as uncollectible
(1,585)
–
Reclassification of other provisions
–
328
At 29/28 February
2,837
3,725
Amounts receivable written off in the year relate to previously fully provided for amounts.
Braemar Plc Annual Report and Accounts 2024
124
4 Balance sheet – Operating assets and liabilities continued
4.2 Trade and other receivables continued
Contract assets
The Group’s contract assets related to accrued income which has not yet been invoiced at the Balance Sheet date. Significant
changes in contract assets during the period are analysed as follows:
£’000
At 1 March 2023
3,388
Contract assets converted to receivables on completion
(3,292)
Contract assets arising on new contracts in-year
1,421
At 29 February 2024
1,517
4.3 Trade and other payables
Commissions payable to co-brokers are recognised in trade payables due within one year on the earlier of the date of invoicing
or the date of receipt of cash. The accounting policy for lease liabilities is set out in Note 3.6.
Current liabilities
2024 2023
£’000 £’000
Trade payables
2,214
1,809
Lease liabilities
1,925
2,923
Other taxation and social security
560
1,869
Other payables
1,974
767
Contract liabilities
334
329
Accruals
36,604
49,613
Total
43,611
57,310
Accruals primarily includes accrued bonuses and other general accruals.
The directors consider that the carrying amounts of trade payables approximate to their fair value .
4.4 Financial instruments and risk management
The Group is exposed through its operations to the following financial risks:
– Currency risk;
– Interest rate risk;
– Credit risk; and
– Liquidity risk.
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note
describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented throughout the Financial Statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies, and other
processes for managing those risks or the methods used to measure them from previous periods.
a) Financial instruments
i) Principal financial instruments
The principal financial instruments used by the Group, from which financial risks arise, are as follows:
– Trade and other receivables;
– Cash and cash equivalents;
– Deferred consideration receivable;
– Contingent consideration receivable;
– Unlisted investments;
– Trade and other payables;
– Revolving credit facility;
– Lease liabilities; and
– Derivative financial instruments.
Notes to the Financial Statements continued
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Strategic Report Governance Financial Statements
ii) Financial instruments by category
Financial instruments measured at fair value
The Group’s financial assets and liabilities measured at fair value through profit and loss, including their fair value hierarchy, are as
follows. Fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction, other than in a
forced or liquidated sale.
As at
Level 1 Level 2 Level 3 29 Feb 2024
£’000 £’000 £’000 £’000
Financial assets:
Unlisted investment
–
–
1,633
1,633
Contingent consideration receivable
–
–
1,082
1,082
Derivative contracts
–
1,536
–
1,536
Total
–
1,536
2,715
4,251
Financial liabilities:
Derivative contracts
–
218
–
218
Embedded derivative
–
–
140
140
Total
–
218
140
358
1
1
As at
Level 1 Level 2 Level 3 28 Feb 2023
£’000 £’000 £’000 £’000
Financial assets:
Unlisted investment
–
1,780
–
1,780
Contingent consideration receivable
–
–
1,407
1,407
Derivative contracts
–
1,254
–
1,254
Total
–
3,034
1,407
4,441
Financial liabilities:
Derivative contracts
–
1,760
–
1,760
Embedded derivative
–
–
384
384
Total
–
1,760
384
2,144
1
1
1 Currency forwards with a fair value of £1.3 million (2023: £1.2 million) maturing within twelve months have been shown as current assets. Currency forwards
with a fair value of £0.2 million (2023: £0.0 million) maturing within 12 to 24 months of the Balance Sheet date have been shown as non-current assets. Liabilities
include currency forwards with a fair value of £0.2 million (2023: £1.1 million) maturing within twelve months shown as current liabilities and currency forwards
with a fair value of £0.0 million (2023: £0.7 million) maturing within 12 to 24 months of the Balance Sheet date shown as non-current liabilities.
Fair value hierarchy
The level in the fair value hierarchy within which the financial asset or liability is categorised is determined on the basis of the lowest
level input that is significant to the fair value measurement.
Financial assets and liabilities are classified in their entirety into one of three levels:
– Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
– Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly.
– Level 3: Inputs for the asset or liability that are not based on observable market data.
Valuation processes
The Group’s finance team and Group Chief Financial Officer are responsible for fair value measurement of financial instruments
and makes the decision as to the valuation technique to be applied, along with the level of external support required. The Group
uses external specialists to value some of the financial instruments included within Level 3 of the fair value hierarchy. The results of
those valuations are reviewed at each reporting date within the finance team.
Braemar Plc Annual Report and Accounts 2024
126
4 Balance sheet – Operating assets and liabilities continued
4.4 Financial instruments and risk management continued
Valuation processes continued
The following table provides a reconciliation of movements in Level 3 financial assets during the year:
Contingent
consideration Unlisted
receivable investments
£’000 £’000
Opening fair value
1,407
–
Transfer into level 3
–
1,780
Unrealised fair value gain/(loss) recognised in operating costs
83
(147)
Cash settlement
(408)
–
Total
1,082
1,633
Unlisted investments
The unlisted investment primarily relates to the Group’s investment in the London Tanker’s Broker Panel, see Note 3.3. In the prior
year the investment was carried at fair value, based on the value of the most recent comparable transaction and was therefore
classified as Level 2 in the fair value hierarchy. Due to the time which has passed since the most recent comparable market
transaction, the Group has valued the investment in the current year based on an income approach which has resulted in the
fair value being deemed to be in Level 3 of the fair value hierarchy. The Group’s policy is that the beginning of the financial year is
considered the date of transfer between levels in the fair value hierarchy. The significant unobservable inputs into the valuation are:
– a discount rate of 16.4%; and
– expected income from the investment.
An increase in the discount rate of 2% would result in an increased fair value loss of £0.1 million recognised in the Income
Statement, while a decrease in the discount rate of 2% would result in a gain of £0.2 million recognised in the Income Statement. A
10% increase/decrease in expected income would result in a £0.1 million gain/loss.
Contingent consideration receivable
The fair value of the contingent consideration receivable includes unobservable inputs and are therefore classified as Level 3.
The contingent consideration receivable relates to the disposal of the Logistics Division whereby the Group is entitled to three
future cash payments. The SPA provides for a minimum guaranteed amount in each of the three years; this amount has been
classified as deferred consideration. The balance of the earnout consideration is contingent on the future performance of the
combined business up to a maximum specified in the SPA; this has been classified as contingent consideration. The fair value
of the contingent consideration has been calculated by reference to management’s expectation of the future profitability of the
combined business and discounted to present value using a discount rate of 5.29%. The discount rate is based on the credit risk
of Vertom Agencies BV assessed by a third-party credit agency. See Note 4.9 for further details and a sensitivity analysis on the
contingent element.
Derivative contracts
Contracts with derivative counterparties are based on ISDA Master Agreements. Under the terms of these arrangements, only in
certain situations will the net amounts owing/receivable to a single counterparty be considered outstanding. The Group does not
have the present legal ability to set-off these amounts and so they are not offset in the Balance Sheet. Of the derivative assets
and derivative liabilities recognised in the Balance Sheet, an amount of £0.2 million (2023: £0.1 million) would be set off under
enforceable master netting agreements.
Forward currency contracts
The fair value of the forward currency contracts are based on prices quoted by the counterparty within these contracts versus the
market rate at the Balance Sheet date and have therefore been classified as Level 2 in the fair value hierarchy. See the currency risk
section for further details.
Currency options
The fair value of the currency options are based on prices quoted by the counterparty within these contracts versus the market
rate at the Balance Sheet date and have therefore been classified as Level 2 in the fair value hierarchy.
Embedded derivative
The convertible loan note instruments issued on the acquisition of Naves contain an embedded derivative, being a euro liability
of principal and interest. The equity value of the underlying derivative is not considered closely related to the debt host, therefore
the loan note is considered to be a financial liability host with an embedded derivative convertible feature which is required to be
separated from the host. The fair value of the embedded derivative includes unobservable inputs and is therefore classified as
Level 3. The key assumptions underpinning the fair value of the embedded derivative relate to the expected future share price of
the Group and the GBP:EUR exchange rate. The fair value has been determined using a Black-Scholes valuation model.
A gain of £244,000 (2023: loss of £18,000) has been recognised in the Income Statement in respect of the fair value movement of
the embedded derivative from 1 March 2023 to 29 February 2024.
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
127
Strategic Report Governance Financial Statements
Financial instruments not measured at fair value
The Group’s financial assets and liabilities that are not measured at fair value are measured at amortised cost. Due to their short-
term nature or frequent repricing, the carrying value of these financial instruments approximates their fair value. Their carrying
values are as follows:
Financial assets
2024 2023
£’000 £’000
Cash and cash equivalents
27,951
34,735
Deferred consideration receivable
2,620
3,637
Trade and other receivables
30,159
41,448
Total
60,730
79,820
Financial liabilities
2024 2023
£’000 £’000
Trade and other payables
4,851
6,446
Convertible loan notes
2,978
3,551
Long term borrowings
26,966
27,815
Total
34,795
37,812
Deferred consideration receivable
The initial fair value of the deferred consideration receivable was determined by discounting the guaranteed minimum amounts as
per the SPA to present value using a discount rate of 2.39% and it is subsequently measured at amortised cost.
b) Currency risk
Currency risk arises when Group entities enter into transactions denominated in a currency other than their functional currency.
The Group’s policy is, where possible, to allow Group entities to settle liabilities denominated in their functional currency with the
cash generated from operations in that currency. The Group’s currency risk exposure arises mainly as a result of the majority of its
earnings being denominated in US dollars while the majority of its costs are denominated in sterling. There is also some currency
exposure related to convertible loan notes and deferred consideration denominated in euros and from the carrying values of its
overseas subsidiaries being denominated in foreign currencies.
The Group manages its transactional exposures to foreign currency risks using forward exchange contracts and currency options.
The Group is primarily exposed to fluctuations in US dollar to sterling exchange rates on foreign currency sales and hedges a
proportion of those expected cash flows out to 17 months. The principal source of hedge ineffectiveness is the risk of changes
in timing of the forecast transaction or that they do not occur, which is addressed by only hedging a proportion of future foreign
currency sales. There were no hedged transactions forecast in the current year which did not occur (2023: £nil).
The Group’s results, which are reported in sterling, are exposed to changes in foreign currency exchange rates across a number
of different currencies with the most significant exposures relating to the US dollar. The Group is exposed to the underlying
translational movements which remain outside the control of the Group. The Group’s translational exposures to foreign currency
risks relate to both the translation of income and expenses and net assets of overseas subsidiaries which are converted into
sterling on consolidation. The Group finances overseas investments partly through the use of foreign currency borrowings in order
to provide a net investment hedge over the foreign currency risk that arises on translation of its foreign currency subsidiaries.
The Group continues to apply hedge accounting to hedging instruments that meet the criteria set out in IFRS 9.
c) Hedge accounting
Derivatives are initially recognised at fair value and are subsequently remeasured at their fair value at each Balance Sheet date
with gains and losses recognised immediately in the Income Statement unless hedge accounting is applied. Recognition of the
resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if it is, the nature of the item
being hedged. Changes in the fair value of derivatives that do not qualify for hedge accounting are recognised immediately in the
Income Statement within finance costs or income.
To qualify for hedge accounting, the terms of the hedge must be clearly documented at inception and there must be an
expectation that the derivative will be highly effective in offsetting changes in the cash flow of the hedged risk. Hedge
effectiveness is tested throughout the life of the hedge and if at any point it is concluded that the relationship can no longer be
expected to remain highly effective in achieving its objective, the hedge relationship is terminated.
The fair value of derivative contracts is based either directly or indirectly on market prices at the Balance Sheet date.
Financial assets and liabilities are classified in accordance with the fair value hierarchy specified by IFRS 13. See Note 4.4 .
Braemar Plc Annual Report and Accounts 2024
128
4 Balance sheet – Operating assets and liabilities continued
4.4 Financial instruments and risk management continued
c) Hedge accounting continued
Cash flow hedge accounting
Cash flow hedges are used to hedge the variability in cash flows of highly probable forecast transactions caused by changes in
foreign currency exchange rates and interest rates. Where a derivative financial instrument is designated in a cash flow hedge
relationship with a highly probable forecast transaction, the effective part of any change in fair value arising is deferred in the cash
flow hedging reserve within equity, via the Statement of Comprehensive Income. The Group designates a portion, being the first
US dollar amounts in a particular period, of forecast revenue transactions in cash flow hedges and reports any gain or loss as part
of revenue when the revenue is recognised. The gain or loss relating to the ineffective part is recognised in the Income Statement
within net finance expense. Amounts deferred in the cash flow hedging reserve are reclassified to the Income Statement in the
periods when the hedged item is recognised in the Income Statement.
If a hedging instrument expires or is sold but the hedged forecast transaction is still expected to occur, the cumulative gain or
loss at that point remains in equity and is recognised in accordance with the above policy when the transaction occurs. If the
hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss recognised in equity is recognised
immediately in the Income Statement.
The critical terms of the hedging instruments match the hedged transactions in relation to currency, timing and amounts,
meaning there is a clear economic relationship between the hedging instrument and hedged item as required under IFRS 9.
Thereby, management qualitatively demonstrates that the hedging instrument and the hedged items will move equally in the
opposite direction.
A gain of £2,231,000 (2023: £4,826,000 loss) in relation to effective hedges has been recognised in the Income Statement in
respect of derivative contracts which have matured in the period. No ineffectiveness in relation to hedge accounting has been
recognised in the period.
In the prior year the Group entered into currency options featuring a “cap and floor” feature. The intrinsic value of the options
is designated in cashflow hedge relationships. The time value of the options is deferred in equity as a cost of hedging and
reclassified to the Income Statement in the period that the hedged cash flow affects the Income Statement.
In a prior year the Group also entered into a currency option which was not designated in a cash flow hedge relationship and
expired during the year (2023: £0.2 million liability). The £0.2 million movement in fair value in the period was charged to the Income
Statement (2023: £0.2 million) and is included within Finance costs.
The effects of the foreign currency-related hedging instruments on the Group’s financial position and performance are as follows:
Currency options 2024
2023
Carrying amount of (liability)/asset
N/A
£(28,000)
Total notional amount
N/A
US $1,500,000
March 2023
Maturity dates
N/A
to April 2023
Hedge ratio
N/A
1:1
Change in fair value of outstanding hedging instruments since inception of the hedge
N/A
£(23,000)
Change in value of hedged item used to determine hedge ineffectiveness
N/A
£23,000
Weighted average strike rate for outstanding hedging instruments
N/A
1.23 to 1.29
Forward currency contracts 2024
2023
Carrying amount of asset
£1,535,990
£1,254,000
Carrying amount of liability
£(217,622)
£(1,547,000)
Total notional amount
US $118,950,000
US $123,048,000
Maturity dates
March 2024
March 2023 to
to July 2025 November 2024
Hedge ratio
1:1
1:1
Change in fair value of outstanding hedging instruments since inception of the hedge
£1,318,368
£(218,000)
Change in value of hedged item used to determine hedge ineffectiveness
£(1,318,368)
£218,000
Weighted average strike rate for outstanding hedging instruments
1.25
1.22
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
129
Strategic Report Governance Financial Statements
Net investment hedge accounting
The Group uses its US dollar denominated borrowings as a hedge against the translation exposure on the Group’s net investment
in overseas companies. The Group designates the spot rate of the loans as the hedging instrument. There was no ineffectiveness
to be recognised on hedges of net investments in foreign operations. Where the hedge is fully effective at hedging the variability in
the net assets of such companies caused by changes in exchange rates, the changes in value of the borrowings are recognised
in the translation reserve within equity, via the Statement of Comprehensive Income. The ineffective part of any change in value
caused by changes in exchange rates is recognised in the Income Statement within finance income or costs. The effective portion
will be recycled into the Income Statement on the sale of the foreign operation.
The table below provides further information on the Group’s net investment hedging relationships:
2024 2023
£’000 £’000
Hedge ratio
1:1
1:1
Change in value of hedging instruments due to foreign currency movements since 1 March
(249)
124
Change in value of the hedged item used to determine hedge effectiveness
249
(124)
The balances and movements into and out of the foreign currency translation reserve are shown in the Consolidated Statement
of Comprehensive Income and the Consolidated Statement of Changes in Equity respectively. The amount in the foreign currency
translation reserve in relation to hedge accounting is a gain of £0.1 million (2023: £0.1 million loss) and is split as follows:
– continuing net investment hedges gain of £0.1 million (2023: £0.1 million loss); and
– hedging relationships for which hedge accounting is no longer applied, £nil (2023: £nil).
The effect on equity and profit before tax if the US dollar or the euro strengthened/(weakened) by 10% against sterling, with all
other variables being equal, is as follows:
Profit or loss
Equity, net of tax
+10% –10% +10% –10%
strengthening weakening strengthening weakening
£’000 £’000 £’000 £’000
29 February 2024
US dollars
1,621
(1,621)
(9,474)
7,100
Euros
40
(40)
40
(40)
Total
1,661
(1,661)
(9,434)
7,060
28 February 2023
US dollars
874
(1,220)
(4,529)
3,656
Euros
(36)
36
(36)
36
Total
838
(1,184)
(4,565)
3,692
d) Interest rate risk
The Group is exposed to interest rate risk from borrowings at floating rates. The Group minimises its short-term exposure to
interest rate risk on its cash and cash equivalents by pooling cash balances across the Group’s entities.
The Group has not entered into any financial instruments to fix or hedge the interest rates applied to its bank borrowings and
overdrafts.
The following table sets out the carrying amount, by maturity, of the Group’s financial instruments which are exposed to interest
rate risk:
Notes
2024 2023
£’000 £’000
Floating rate:
Within one year
Cash and cash equivalents
4.5
27,941
34,735
Long-term borrowings
4.6
(27,237)
(27, 8 1 5)
704
6,920
Braemar Plc Annual Report and Accounts 2024
130
4 Balance sheet – Operating assets and liabilities continued
4.4 Financial instruments and risk management continued
Cash balances are generally held on overnight deposits at floating rates depending on cash requirements and the prevailing
market rates for the amount of funds deposited. The other financial instruments of the Group are non-interest bearing.
The effect on equity and profit before tax of a 1% increase/(decrease) in the interest rate, all other variables being equal, is
as follows:
Profit or loss
Equity, net of tax
+1% –1% +1% –1%
increase decrease increase decrease
£’000 £’000 £’000 £’000
29 February 2024
Cash and cash equivalents
308
(308)
308
(308)
Long-term borrowings
(266)
266
(266)
266
Total
42
(42)
42
(42)
28 February 2023
Cash and cash equivalents
187
(187)
187
(187)
Long-term borrowings
(195)
195
(195)
195
Total
(8)
8
(8)
8
e) Credit risk
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets.
Concentrations of credit risk with respect to trade receivables are limited due to the diversity of the Group’s customer base. The directors
believe there is no further credit risk provision required in excess of normal provisions for doubtful receivables, estimated by Management
based on prior experience and their assessment of the current economic environment. The Group seeks to trade only with creditworthy
parties and carries out credit checks where appropriate. The maximum exposure is the carrying amount as disclosed in Note 4.4.
f) Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt
instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due.
Management receives rolling 13-week cash flow projections on a weekly basis to ensure the Group has sufficient liquidity.
The board receives rolling twelve month cash flow projections on a monthly basis as well as information regarding cash balances.
At the end of the financial year, these projections indicated that the Group expected to have sufficient liquid resources to meet
its obligations under all reasonably expected circumstances.
The following table sets out the undiscounted contractual amounts due, in relation to the Group’s financial liabilities which exposes
the Group to liquidity risk:
At 29 February 2024
Between Between Between Total Total
Up to 3 and 12 1 and 2 2 and 5 Over contractual carrying
3 months months years years 5 years amount amount
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Trade and other payables
4,245
606
–
–
–
4,851
4,851
Loans and borrowings
487
1,460
28,586
–
–
30,533
26,966
Lease liabilities
846
1,253
1,013
2,062
44
5,218
4,778
Convertible loan notes
46
47
3,190
–
–
3,283
2,978
Total
5,624
3,366
32,789
2,062
44
43,885
39,573
Forward currency contracts
218
Gross outflows
1,779
7,946
1,818
–
–
11,543
Gross inflows
(1,769)
(7,784)
(1,775)
–
–
(11,328)
Currency options
–
Gross outflows
–
–
–
–
–
–
Gross inflows
–
–
–
–
–
–
Net outflow from derivative contracts
10
162
43
–
–
215
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
131
Strategic Report Governance Financial Statements
At 28 February 2023
Between Between Between Total Total
Up to 3 and 12 1 and 2 2 and 5 Over contractual carrying
3 months months years years 5 years amount amount
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Trade and other payables
4,971
1,388
87
–
–
6,446
6,446
Loans and borrowings
422
1,266
1,688
29,242
–
32,618
27,815
Lease liabilities
757
2,271
1,375
799
23
5,225
5,027
Convertible loan notes
66
764
109
3,726
–
4,665
3,551
Total
6,216
5,689
3,259
33,767
23
48,954
42,839
Forward currency contracts
1,547
Gross outflows
14,749
48,925
29,414
–
–
93,088
Gross inflows
(14,553)
(48,866)
(28,521)
–
–
(91,940)
Currency options
213
Gross outflows
3,107
5,593
1,864
–
–
10,564
Gross inflows
(3,084)
(5,593)
(1,864)
–
–
(10,541)
Net outflow from derivative contracts
219
59
893
–
–
1,171
Loans and borrowings have been represented to show the expected interest payments payable on the revolving credit facility in
addition to the repayment of the loan.
g) Capital management
The Group manages its capital structure so as to maintain investor and market confidence and to provide returns to shareholders that will
support the future development of the business. The Group makes adjustments to the capital structure if required in response to changes in
economic conditions. The Group considers its capital as consisting of ordinary shares and retained earnings. To maintain or adjust the capital
structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
The Group has a policy of maintaining positive cash balances and also has a revolving credit facility which it draws down as
required to provide cover against the cyclical nature of the shipping industry.
The board monitors underlying business performance to determine the ongoing use of capital, namely executive and staff
incentive schemes (and whether to fund this through cash or share incentives); acquisition appraisals ahead of potential business
combinations; investment in property, plant and equipment; and the level of dividends.
No changes were made in the objectives, policies or processes during the years ended 29 February 2024 and 28 February 2023.
4.5 Cash and cash equivalents
Cash and cash equivalents included in the Balance Sheet comprise cash in hand, short-term deposits with an original maturity
of three months or less and restricted cash.
Cash and cash equivalents included in the Cash Flow Statement include cash and short-term deposits. Bank overdrafts are
included in the Balance Sheet within short-term borrowings.
2024 2023
£’000 £’000
Cash at bank and cash in hand
27,951
34,735
Total
27,951
34,735
Cash and cash equivalents largely comprise bank balances denominated in sterling, US dollars, euros and other currencies for the
purpose of settling current liabilities.
Cash includes an amount of £4.6 million (2023: £4.0 million) held in the bank accounts of regulated entities where there is a
requirement to hold a certain amount of cash at any one time in order to cover future obligations. No charge or other restriction
of use is held over this cash.
The Directors consider that the carrying amounts of these assets approximate to their fair value.
4.6 Long-term borrowings
Arrangement costs for loan facilities are capitalised and amortised over the life of the debt at a constant rate. Finance costs are
charged to the Income Statement, based on the effective interest rate of the associated external borrowings and debt instruments.
Braemar Plc Annual Report and Accounts 2024
132
4 Balance sheet – Operating assets and liabilities continued
4.6 Long term borrowings continued
Modification of terms of financial liabilities
When the terms of an existing financial liability are modified, management will consider both quantitative and qualitative factors
to assess whether the modification is substantial. In the case that the modification of the terms of existing financial liability
is considered to be substantial, the modification shall be accounted for as an extinguishment of that financial liability and
the recognition of a new financial liability. If the modification is not considered substantial, then the existing financial liability is
remeasured in accordance with its original classification and any gain or loss is recognised immediately in the Income Statement.
2024 2023
£’000 £’000
Long-term borrowings
Secured revolving credit facilities
26,966
27,815
Lease liabilities
2,853
2,104
Total
29,819
29,919
The Group’s revolving credit facility (“RCF”) is for £30.0 million plus an accordion limit of £10.0 million and has an initial termination date of
November 2025 with an option, subject to lender approval, to extend the term of the facility by 24 months. Drawdown of the accordion
facility is subject to additional credit approval. The RCF agreement has an EBITDA leverage covenant of 2.5x and a minimum interest
cover of 4x. At 31 May 2023, 31 August 2023, 31 November 2023 and 29 February 2024 the Group met all financial covenant tests.
Amounts can be rolled on a monthly basis until the facility expires subject to certain conditions, and on that basis the borrowings have
been classified as non-current. The amounts drawn under the RCF bear interest based on SONIA, SOFR and EURIBOR from amounts
drawn in sterling, US dollars and euros respectively, plus a credit margin dependent on the Group’s leverage ratio.
All revolving credit facilities are drawn by Braemar Plc and appear in the accounts of the Company. See Note 4.5 for details of the
Group’s cash pooling arrangements and the net overdraft available to the Group.
The directors consider that the fair value of the revolving credit facility liability is equivalent to its carrying amount.
4.7 Convertible loan notes
The convertible loan notes are considered to be a financial liability host with an embedded derivative convertible feature which is
required to be separated from the host. The Group has an accounting choice to record the instrument in its entirety at fair value
through profit and loss but has not chosen to apply this treatment. Instead, the financial liability host is recognised as a euro liability
initially recognised at fair value and prospectively accounted for applying the effective interest rate method. As the loan notes are
denominated in euros, the conversion feature does not meet the definition of an equity instrument. As a result, it is treated as a
separated embedded derivative and is recognised at fair value through profit and loss. Where there are conversion options that
can be exercised within one year the liability is recognised as current.
In September 2017, the Group acquired the entire share capital of Naves Corporate Finance GmbH (“Naves”). Naves is an
established and successful business, headquartered in Hamburg, Germany, which advises national and international clients
on corporate finance related to the maritime industry, including restructuring advisory, corporate finance advisory, M&A, asset
brokerage, interim/pre-insolvency management and financial asset management including loan servicing.
The acquisition agreement provided for consideration of £16.0 million (€18.4 million) payable as follows:
i) at completion in cash of £7.3 million (€8.3 million), in shares of £1.3 million (€1.5 million) and in convertible loan notes of
£6.4 million (€7.4 million); and
ii) deferred consideration in cash of £0.5 million (€0.6 million) and convertible loan notes of £0.5 million (€0.6 million), payable
in instalments over the three years after the acquisition.
The acquisition agreement also provided deferred amounts that would be payable to management sellers, conditional on their
ongoing service in the business. IFRS 3 states that amounts paid to former owners which are conditional on ongoing service are
for the benefit of the acquirer and not for the benefit of former owners. Consideration linked to the ongoing service of former
owners is treated as remuneration for post-combination services and classified as acquisition-related expenditure under specific
items in the Income Statement.
The deferred amounts payable to management sellers comprised:
i) deferred cash of £1.3 million (€1.5 million) and deferred convertible loan notes of £4.3 million (€4.9 million) conditional only on
the individual management seller’s continued service payable in instalments over the five years after the acquisition; and
ii) deferred convertible loan notes of up to £9.4 million (€11.0 million) conditional on the individual management seller’s continued
service and the post-acquisition Naves’ EBIT in the three years post-acquisition. By February 2021, there was no contingency
remaining and the total amount paid was £4.6 million (€5.3 million).
Following the issuance of new convertible loan notes in the prior year, at February 2024 no amounts are subject to future
service conditions.
No post-acquisition remuneration associated with the acquisition was incurred during the year ended 29 February 2024
(2023: £0.1 million).
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
133
Strategic Report Governance Financial Statements
Convertible instruments
The Group issued convertible loan notes in connection with its acquisition of Naves in September 2017.
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 390.3 pence for management sellers and 450.3 pence for non-management sellers.
The convertible loan note instruments carry certain accelerated conversion rights in the event of default on financial commitments
associated with the instruments or business distress within the Group. The loan notes shall automatically convert or be redeemed
in the event that any person or persons acting in concert hold more than 50% of the issued share capital of the Group or an
impairment charge in excess of £43.9 million (€50.0 million) is reflected in the audited Financial Statements of the Group.
The embedded derivatives within the convertible loan notes are valued using level 3 hierarchy techniques under IFRS 13. See Note 4.4.
The total value of convertible loan note liabilities, including linked derivatives, is £3.1 million (2023: £3.9 million). The following table
shows amounts in the Group balance sheet relating to the convertible loan notes issued on the acquisition of Naves.
Represented in the Group Balance Sheet
2024 2023
£’000 £’000
Current liabilities:
Convertible loan notes
632
699
Non-current liabilities:
Convertible loan notes
2,346
2,852
Derivatives
140
384
2,486
3,236
3,118
3,935
The movement in the Naves-related balances in the Group Balance Sheet during the year is explained by the items below:
2024 2023
£’000 £’000
Total Naves-related balances at start of year
3,935
4,917
Finance expense
227
408
Derivative (gain)/loss
(244)
18
Post-acquisition remuneration
–
59
Foreign exchange movements
(89)
250
Cash paid
(711)
(1,606)
Equity issued
–
(111)
Total movements
(817)
(982)
Total Naves-related balances at year-end
3,118
3,935
The current year cash paid includes interest of £0.1 million (2023: £0.2 million).
The loan notes have the following maturities:
Accounting value
Nominal value
2024 2023 2024 2023
£’000 £’000 €’000 €’000
Due at the reporting date
30-Sep-23
–
606
–
699
30-Sep-24
568
550
699
699
30-Sep-25
2,410
2,395
2,929
2,929
2,978
3,551
3,628
4,327
Derivatives thereon
140
384
Total liabilities on loan notes
3,118
3,935
Braemar Plc Annual Report and Accounts 2024
134
4 Balance sheet – Operating assets and liabilities continued
4.7 Convertible loan notes continued
Convertible instruments continued
Note that current liabilities in respect of the loan notes differs from the amounts shown above maturing within one year due to
interest payable within one year on non-current loans and the outstanding current liability to deliver cash and shares in respect of
matured loan notes.
4.8 Reconciliation of liabilities from financing activities
RCF Convertible Deferred Lease
borrowings loan notes consideration liabilities Total
£’000 £’000 £’000 £’000 £’000
At 1 March 2023
27,815
3,551
–
5,027
36,393
Cash flows
(598)
(598)
–
(3,143)
(4,339)
Non-cash flows:
– Interest accruing in the period
153
114
–
–
267
– Fees paid reported as operating cash flows
(122)
–
–
–
(122)
– New leases
–
–
–
3,021
3,021
– Effects of foreign exchange
(282)
(89)
–
(127)
(498)
At 29 February 2024
26,966
2,978
–
4,778
34,722
Current portion
–
632
–
1,925
2,557
RCF
1
borrowings
£’000
Convertible
1
loan notes
£’000
Deferred
consideration
£’000
Lease
liabilities
£’000
Total
£’000
At 1 March 2022 23,254 4,171
495
8,506
36,426
Cash flows
4,694
(1,448)
–
(3,864)
(618)
Non-cash flows:
– Shares issued
–
(111)
–
–
(111)
– Derivatives issued
–
(71)
–
–
(71)
– Accrual of service cost
–
59
–
59
– Interest accruing in the period
32
250
–
–
282
– Fees paid reported as operating cash flows
(336)
–
–
–
(336)
– New leases
–
–
–
770
770
– Business combinations
–
–
–
86
86
– Lease terminations
–
–
–
(632)
(632)
– Amounts reclassified from deferred consideration
to loans
–
615
(615)
–
–
– Effects of foreign exchange
171
145
61
161
538
At 28 February 2023
27,815
3,551
–
5,027
36,393
Current portion
–
699
–
2,923
3,622
2
2
1 In the prior year, RCF borrowings and the convertible loan notes were disclosed in the aggregate. The movement in balances during the year ended 28 February
2023 has been updated to reflect the current year presentation which provides the reconciliation separately for the RCF and the convertible loan notes.
2 In the prior year, ‘Interest accruing in the period’ included cash settled interest charges in relation to lease liabilities and the combined total for the RFC and convertible
loan notes. These charges were offset by interest ‘Cash flows’ as reported in the reconciliation. The prior year numbers have been updated to remove these interest
cash flows from both ‘Interest accruing in the period’ and ‘Cash flows’. The effect is to reduce ‘Cash flows’ by £0.5 million and reduce ‘Interest accruing in the period’
by £0.2 million and include an additional item relating to fees paid of £0.3 million. There is no overall impact on total reported cash flows, opening or closing balances.
4.9 Deferred and contingent consideration receivable
Contingent consideration receivable is initially recognised at fair value and is subsequently remeasured at its fair value at each
Balance Sheet date. The resulting gain or loss is recognised immediately in the Income Statement. Contingent consideration
receivable is classified as Level 3 in accordance with the fair value hierarchy specified by IFRS 13. Deferred consideration is initially
measured at its fair value and subsequently measured at amortised cost less provision for impairment.
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
135
Strategic Report Governance Financial Statements
Key estimate
On 28 February 2022, the Group sold Cory Brothers to Vertom Agencies BV for maximum consideration of £15.5 million. Initial
cash proceeds of £6.5 million were received on completion of the transaction, and three contractual “earnout” payments
will be made, being an agreed percentage of the future gross profits of the combined VertomCory business over three
subsequent twelve month earn out periods. The remaining “earnout” payments are subject to a combined minimum of
£2.7 million and a combined maximum of £6.4 million.
The minimum earnout consideration has been classified as deferred consideration receivable. The minimum amount is
specified in the SPA and is therefore not an estimate, however an estimate of a discount rate is necessary to discount the
deferred consideration receivable. A discount rate of 2.39% was used to calculate the net present value; this was based on
the credit risk of Vertom Agencies BV following a credit check performed by management. Deferred consideration receivable
is initially recognised at fair value and subsequently measured at amortised cost.
The balance of the earnout consideration, up to the maximum specified in the SPA has been classified as contingent consideration
receivable because it is contingent on the future profitability of the combined business. The fair value of the contingent consideration
receivable involves two critical estimates: the future profitability of the combined business and the discount rate used to calculate the
net present value. The future profitability forecasts are based on a business plan prepared by the combined VertomCory business.
Contingent consideration receivable is initially recognised at fair value and subsequently measures at fair value through profit and loss.
The fair value of the contingent consideration is calculated using the forecast gross profit for the combined VertomCory
business for each earnout period, applying the agreed percentage, deducting the minimum payment and discounting the
forecast contingent cashflows. The valuation of the contingent consideration involves two critical estimates: the future
profitability of the combined business and the discount rate used to calculate the net present value. The future profitability
forecasts are based on a business plan prepared by the combined VertomCory business and was reviewed by management
as part of the financial due diligence process. A discount rate of 5.45% (2023: 5.29%) was used to calculate the net present
value; this was based on the credit risk of Vertom Agencies BV following a credit check performed by management.
Set out below is a sensitivity analysis of the contingent consideration receivable to the discount rate and the assumptions of
future profitability.
Fair value of Cory Brothers deferred and contingent consideration receivable
The agreed minimum earnout payment is presented as deferred consideration and measured at amortised cost, using a discount
rate of 2.39% determined on initial measurement. The uncertain element of each earnout payment is measured at fair value
through profit or loss and presented as contingent consideration.
Deferred and contingent consideration are included in other long-term receivables (see Note 4.1) and current other receivables
(see Note 4.2). The amortised cost of the deferred consideration is £2.6 million (2023: £3.6 million). The fair value of the contingent
consideration is £1.1 million (2023: £1.4 million).
During the year, the Group received £1.5 million (in the Group Cash Flow Statement, £1.4 million is allocated to investing activities
and £0.1 million to interest received) in relation to the first deferred and contingent consideration payment. The receivable held on
the Balance Sheet at 29 February 2024 in relation to the second earnout payment is £1.9 million (£1.3 million deferred consideration
and £0.6 million contingent consideration).
Sensitivity analysis
Management have considered the sensitivity of the contingent consideration receivable arising from the second and third earnout
payments to both changes in the estimate of future profitability of the VertomCory agency business, and the discount rate selected.
Carrying Undiscounted of future gross profits of the Sensitivity to the estimate Sensitivity to change in the
value as at value as at VertomCory agency business discount rate selected
29 February 29 February Decrease by Increase by Decrease by Increase by
2024 2024 10% 10% 1% p.a. 1% p.a.
£’000s £’000s £’000s £’000s £’000s £’000s
Payment due on 31 May 2024
550
557
N/A
N/A
1
(1)
Payment due on 31 May 2025
532
569
(177)
177
6
(6)
Total
1,082
1,126
(177)
177
7
(7)
The 10% increase/decrease in future gross profits of the VertomCory agency business considered in the sensitivity analysis is
selected to reflect a reasonably likely variation in outcomes, which lie within a range covered by the minimum and maximum
earnout thresholds. The change in discount rate considered reflects the observed range of three-year GBP corporate bond rates
with similar credit risk. No sensitivity is provided for the payment due on 31 May 2024 as the payment amount is based on actual
reported performance.
Braemar Plc Annual Report and Accounts 2024
136
5 Employee remuneration schemes
5.1 Long-term employee benefits
Key estimate
Valuation of defined benefit pension scheme
The Group uses an independent actuary to provide annual valuations of the defined benefit pension scheme. The actuary
uses a number of estimates in respect of the scheme membership, the valuation of assets and assumptions regarding
discount rates, inflation rates and mortality rates.
The membership details are provided by an independent trustee while the valuation of assets is verified by an independent
fund manager. The discount rates, inflation rates and mortality rates are reviewed by management at each reporting date.
Critical judgement
Recoverability of defined benefit pension scheme net asset
As a result of actuarial movements during the year, including an increase in the discount rate from 4.9% at 28 February 2023
to 5.0% at 29 February 2024, the UK defined benefit scheme continues to be in an actuarial surplus position at 29 February
2024 (measured on an IAS 19 “Employee Benefits” basis) of £1.4 million (28 February 2023: £1.1 million). The surplus has been
recognised on the basis that the Group has an unconditional right to a refund, assuming the gradual settlement of Scheme
liabilities over time until all members have left the Scheme. The surplus will be subject to a tax charge on its recovery which the
Group does not believe meets the definition of an income tax under IAS 12, and as a result, the surplus has been presented
net of the expected taxes payable of £0.8 million, at a rate of 35%. The free-standing tax charge will reduce from 35% to 25%
from 6 April 2024, this measure was substantively enacted on 11 March 2024. The impact of the change in rate is not expected
to have a material impact on the Group.
The Group has the following long-term employee benefits:
i) Defined contribution schemes
The Group operates a number of defined contribution schemes. Pension costs charged against profits in respect of these
schemes represent the amount of the contributions payable to the schemes in respect of the accounting period. The assets
of the schemes are held separately from those of the Group within independently administered funds. The Group has no
further payment obligations once the contributions have been paid.
ii) Defined benefit schemes
The Group operates a defined benefit scheme, the ACM Staff Pension Scheme, with assets held separately from the Group.
The cost of providing benefits under the scheme is determined using the projected unit credit actuarial valuation method which
measures the liability based on service completed and allowing for projected future salary increases and discounted at an
appropriate rate.
The current service cost, which is the increase in the present value of the retirement benefit obligation resulting from employee
service in the current year, and gains and losses on settlements and curtailments, are included within operating profit in the
Income Statement. The unwinding of the discount rate on the scheme liabilities which is shown as a net finance cost and past
service costs are presented and recognised immediately in the Income Statement.
The pension asset or liability recognised on the Balance Sheet in respect of this scheme represents the difference between the
present value of the Group’s obligations under the scheme and the fair value of the scheme’s assets. Actuarial gains or losses
and return on plan assets net of tax, excluding interest, are recognised in the period in which they arise within the Statement of
Comprehensive Income.
When the defined benefit plan is in a surplus, the asset is recognised at the lower of the surplus and the asset ceiling, less any
associated costs, such as taxes payable.
iii) Other long-term benefits
The current service cost of other long-term benefits resulting from employee services in the current year is included within the
Income Statement. The unwinding of any discounting on the liabilities is shown in net finance costs.
The Group operates a defined benefit scheme in the UK. A full actuarial valuation was carried out as at 31 March 2023 and
updated by the IAS 19 valuation as at 29 February 2024. All valuations have been carried out by a qualified independent actuary.
The Group’s obligations in respect of the funded defined benefit scheme at 29 February 2024 were as follows:
2024 2023
£’000 £’000
Present value of funded obligations
10,609
10,558
Fair value of scheme assets, net of tax
(12,023)
(11,678)
Total surplus of defined benefit pension scheme
(1,414)
(1,120)
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
137
Strategic Report Governance Financial Statements
Funded defined benefit scheme
The Group sponsors a funded defined benefit scheme (the ACM Staff Pension Scheme) for qualifying UK employees. The
Scheme is administered by a separate board of Trustees which is legally separate from the Group. The Trustees are composed
of representatives of both the employer and employees. The Trustees are required by law to act in the interest of all relevant
beneficiaries and are responsible for the investment policy with regard to the trust assets and the day-to-day administration
of benefits.
Under the Scheme, employees are entitled to annual pensions on retirement at age 60 of 1/60th of final pensionable salary
for each year of service. Pensionable salary is defined as basic salary plus the average of the previous three years’ bonuses
(capped at three times basic salary). Pensionable salaries for members who joined after 1 June 1989 are also subject to an
earnings cap. Other benefits are payable, for example those provided on death.
The scheme was closed to future accrual and from 1 February 2016, post-retirement benefits are provided to these employees
through a separate defined contribution arrangement.
Profile of the Scheme
The defined benefit obligation includes benefits for current employees, former employees, and current pensioners. Broadly,
around 50% of the liabilities are attributable to deferred pensions for current and former employees, with the remaining 50%
to current pensioners.
The Scheme duration is an indicator of the weighted average time until benefit payments are made. For the Scheme as a whole,
the duration is around 14.8 years (2023: 15.3 years).
Funding implications
UK legislation requires that pension schemes are funded prudently. The most recent funding valuation of the Scheme was carried
out by a qualified actuary as at 31 March 2023 and showed a surplus of £0.3 million.
Risks associated with the Scheme
The Scheme exposes the Group to a number of risks, the most significant of which are:
Asset volatility
The liabilities are calculated using a discount rate set with reference to corporate bond yields; if assets underperform this yield, this
will create a deficit. The Scheme holds a significant proportion of growth assets which, though expected to outperform corporate
bonds in the long term, create volatility and risk in the short term. The allocation to growth assets is monitored to ensure it remains
appropriate given the Scheme’s long-term objectives.
Changes in bond yields
An increase in corporate bond yields will decrease the value placed on the Scheme’s liabilities for accounting purposes, although
this will be partially offset by a Decrease in the value of the Scheme’s bond holdings.
Inflation risk
A proportion of the Scheme’s benefit obligations are linked to inflation and higher inflation will lead to higher liabilities (although, in
most cases, caps on the level of inflationary increases are in place to protect against extreme inflation). The majority of the assets
are either unaffected by or only loosely correlated with inflation, meaning that an increase in inflation will also increase the deficit.
Life expectancy
The majority of the Scheme’s obligations are to provide benefits for the life of the member, so increases in life expectancy will result
in an increase in scheme liabilities.
The Company and Trustees have agreed a long-term strategy for reducing investment risk as and when appropriate. This includes
moving assets to match pensioner liabilities when members reach retirement.
The Trustees insure certain benefits payable on death before retirement.
The principal assumptions used for updating the latest valuation of the Scheme were:
2024 2023
(% p.a.) (% p.a.)
Discount rate
5.0
4.9
CPI inflation
2.6
3.0
Pension increases:
CPI capped at 2.5% p.a.
2.1
2.0
CPI capped at 5.0% p.a.
3.0
3.0
Deferred pension increases:
CPI capped at 2.5% p.a.
2.1
2.0
CPI capped at 5.0% p.a.
3.0
3.0
Braemar Plc Annual Report and Accounts 2024
138
5 Employee remuneration schemes continued
5.1 Long-term employee benefits continued
2024 2023
Years Years
Life expectancy from age 60 for:
Current 60-year-old male
25.6
25.1
Current 60-year-old female
28.0
2 7.7
Pre-retirement mortality
–
–
Post-retirement mortality
S2 PXA, CMI 2022/2021 (min 1.25%)
Early retirement
No allowance for early retirement (2023: 33% of members retire at age 55,
with the remainder retiring at age 60)
Withdrawals from active service
No allowance
Cash commutation
80% of members assumed to take maximum lump sum (2023: 100%)
All members are assumed to retire at age 60.
The Scheme’s assets are split by type of asset in the following table.
Scheme assets
2024 2023
£’000 £’000
Scheme assets are comprised as follows:
UK equities
359
434
Overseas equities
4,387
4,374
Unquoted equities
–
78
High yield debt
986
1,019
Cash
1,031
707
Inflation-linked bonds
1,142
1,022
Corporate bonds
2,793
1,883
Government bonds
1,726
1,303
Other
360
1,462
Total
12,784
12,282
The Pension Scheme assets do not include any ordinary shares issued by the Company. All assets are held through pooled
investment vehicles.
Expense recognised in the Income Statement (included in operating costs)
2024 2023
£’000 £’000
Current service cost
–
–
Interest (income)/expense on net asset/liability
(85)
54
Expense recognised in Income Statement
(85)
54
Remeasurements in other comprehensive expense:
(Gain)/loss on assets in excess of that recognised in net interest
(201)
1,061
Actuarial gains due to changes in financial assumptions
(179)
(4,594)
Actuarial loss/(gain) due to changes in demographic assumptions
127
(220)
Actuarial (gain)/loss due to liability experience
(77)
374
Deferred tax charge
–
414
Expected tax charge on recovery of assets
157
604
Gain recognised in other comprehensive income
(173)
(2,361)
Total amount recognised in Income Statement and other comprehensive expense
(258)
(2,307)
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
139
Strategic Report Governance Financial Statements
Changes to the present value of the defined benefit obligation are analysed as follows:
2024 2023
£’000 £’000
Opening defined benefit obligation
10,558
15,156
Interest expense
517
402
Actuarial gains due to changes in financial assumptions
(179)
(4,594)
Actuarial loss/(gain) due to changes in demographic assumptions
127
(220)
Actuarial (gain)/loss due to liability experience
(76)
374
Net benefit payments from scheme
(338)
(560)
Closing value at 29 February (2023: 28 February)
10,609
10,558
Changes in the fair value of plan assets are analysed as follows:
2024 2023
£’000 £’000
Opening fair value at 1 March
11,678
13,104
Interest income
602
348
Fair value gain/(loss) on assets
201
(1,061)
Contributions by employers
37
450
Net benefit payments from scheme
(338)
(559)
Expected tax charge on recovery of assets
(157)
(604)
Closing value at 29 February (2023: 28 February)
12,023
11,678
The Group does not expect to make any contributions to the scheme in the next twelve months (2023: £37,500).
Actual return on Scheme assets
2024 2023
£’000 £’000
Interest income on plan assets
602
348
Remeasurement gain/(loss) on assets
201
(1,061)
Actual return on assets
803
(713)
Sensitivity analysis
The table below illustrates the sensitivity of the Scheme liabilities at 29 February 2024 to changes in the principal assumptions. The
sensitivities assume that all other assumptions remain unchanged and the calculations are approximate (full calculations could lead
to a different result).
Change in assumption
Approximate Approximate
increase in increase in
liabilities liabilities
% £’000
Interest rate reduced by 0.5% p.a.
9.0
955
Inflation assumption increased by 0.5% p.a.
1
5.9
626
Increase in life expectancy of one year for all members reaching 60
2.5
265
1 The inflation assumption sensitivity applies to both the assumed rate of increase in the CPI and the RPI, and includes the impact on the rate of increases to
pensions, both before and after retirement.
Defined contribution schemes
There are a number of defined contribution schemes in the Group, the principal scheme being the Braemar Pension Scheme,
which is open to all UK employees. Cash contributions paid into the defined contribution schemes are accounted for as an Income
Statement expense as they are incurred. The total charge for the year in respect of this and other defined contribution schemes
amounted to £2,247,000 (2023: £1,811,000) which was in respect of continuing operations.
Contributions of £180,000 were due to these schemes at 29 February 2024 (2023: £nil).
The assets of these schemes are held separately from those of the Group in funds under the control of the Trustees.
Braemar Plc Annual Report and Accounts 2024
140
5 Employee remuneration schemes continued
5.2 Share-based payments
The Group operates a number of equity-settled share-based payment schemes.
No awards may be granted under the schemes set out below which would result in the total number of shares issued or remaining
issuable under all of the schemes (or any other Group share schemes), in the ten-year period ending on the date of grant of the
option, exceeding 10% of the Company’s issued share capital (calculated at the date of grant of the relevant option).
All of the Group’s share schemes are accounted for as equity-settled share-based payments because they only entitle the
employee to receive equity instrument issued by the Parent Company. The Group may provide a net settlement feature, whereby it
withholds the number of equity instruments equal to the monetary value of the employee’s tax obligation arising from the exercise
(or vesting) of the award if the total number of shares that otherwise would have been issued to the employee. The Group has
no contractual obligation to provide a net settlement option, and therefore the award is still accounted for as an equity-settled
award in full and the value of the shares foregone by the employee is accounted for as a deduction from equity. Occasionally the
Group, at its discretion, might repurchase vested equity instruments. In accordance with IFRS 2, such payments to employees
are accounted for as a deduction from equity, except to the extent the payment exceeds the fair value of the equity instruments
repurchased.
The net cost of the shares acquired for the shares held by the ESOP and the EBT are a deduction from shareholders’ funds and
represent a reduction in distributable reserves. Note 6.3 provides detail on the ESOP and the EBT and movements in shares to
be issued.
Key estimate
Share option vesting
The fair value determined at the grant date of the equity-settled share-based payments is typically expensed on a straight-
line basis over the vesting period, based on the Group’s estimate of the number of equity instruments that will eventually vest.
At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the
effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in
the Income Statement such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to
reserves.
A 1% increase in the forfeiture assumption for all awards which were not vested at 29 February 2024 would result in an
additional charge to the Income Statement of £0.1 million in FY24, while a 5% increase in the forfeiture assumption would result
in an additional charge of £0.6 million to the Income Statement in FY24. While the Group believes that a change in estimate
of 5% or greater for all awards in any one year is unlikely, due to the fact that the value of awards are not uniform between
employees, the Group believes that there is a significant risk that a revision to the forfeiture estimate could result in a material
impact to the Income Statement in the next financial year depending on the profile of leavers.
Share Option Scheme
During the prior year the Company operated the Braemar Plc Savings-Related Share Option Scheme 2014 (the “SAYE Scheme”)
and the Braemar Plc International Savings-Related Share Option Scheme 2019 (the “International SAYE Scheme”). Options are
granted at up to a 20% discount to the prevailing market price and entitle employees to purchase shares in the Company at a
fixed price subject to continued employment. The fair value of share options granted under the SAYE schemes is determined using
a binomial pricing model. The number of awards which are expected to vest is estimated by management based on levels of
expected forfeitures.
Deferred Bonus Plan (“DBP”)
The Company adopted a Deferred Bonus Plan in May 2020 (the “2020 DBP”), pursuant to which future discretionary bonus awards
will be granted to staff including executive directors. Awards under the New DBP may be linked to an option granted under the new
Braemar Company Share Option Plan 2020, which was also adopted by the Company in May 2020 (the “2020 CSOP”). Where an
employee receives a linked award under the 2020 DBP, if the Company’s share price rises over the vesting period, the 2020 CSOP
award can be exercised with the value of shares delivered on the vesting of the 2020 DBP award being reduced by the exercise
gain on the 2020 CSOP award. Awards under the 2020 DBP and the 2020 CSOP may be settled by the issue of new shares of by
way of transfer of shares from the ESOP. Historical practice has been to settle via the transfer of shares from the ESOP and it is the
current intention to continue to operate in this manner.
The number of awards granted under the Deferred Bonus Plan each year is related to the profits generated in the previous year.
The cost of the award is therefore expensed from the beginning of that profit period until the vesting date which is usually three
years after the date of award and is subject to continued employment. Awards made to new joiners are expensed over the period
from date of joining to date of vesting. Their fair value is estimated based on the share price at the time of grant less the expected
dividend to be paid during the vesting period. The number of awards which are expected to vest is estimated by management
based on levels of expected forfeitures.
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
141
Strategic Report Governance Financial Statements
Restricted Share Plan (“RSP”)
During the year ended 28 February 2015, the Company established a Restricted Share Plan (“RSP”). This scheme was set up to
grant awards to certain key staff to try to retain them following the merger between Braemar and ACM Shipping Group Plc, but it
can also be used where the Remuneration Committee considers it necessary to secure the recruitment of a particular individual.
Executive directors of the Company are not eligible to participate in the RSP. RSP awards are made in the form of a nil cost option
and there are no performance criteria other than continued employment. Their fair value is estimated based on the share price at
the time of grant less the expected dividend to be paid during the vesting period. The number of awards which are expected to
vest is estimated by management based on levels of expected forfeitures.
Long Term Incentive Plan (“LTIP”)
The Company also operates an LTIP, which was approved by shareholders and adopted in 2014. LTIP awards under this plan take
the form of a conditional right to receive shares at £nil cost. The awards normally vest over three years and are typically subject to
a performance condition such as earnings per share (“EPS”) or Total Shareholder Return (“TSR”), a market-based condition.
The fair value of awards with the EPS condition are non-market conditions and their fair value is estimated based on the share
price at the time of grant less the expected dividend to be paid during the vesting period. The fair value of awards containing
market conditions is determined using Monte Carlo simulation models. The number of awards which are expected to vest is
estimated by management based on levels of expected forfeitures and the expected outcome of the EPS condition. For awards
subject to market conditions, no adjustment is made to reflect the likelihood of the market condition being met nor the actual
number of awards which lapse as a result of the condition not being met.
The Company operates a variety of share-based payment schemes which are listed below.
a) Share options
Details of the share options in issue and the movements in the year are given below:
Number at
Year option Number at 29 February Exercise price Exercisable
Share scheme granted
1 March 2023
Granted
Exercised
Lapsed
2024 (pence) between
SAYE
N/A
–
–
–
–
–
N/A
N/A
During the prior year, 433,528 options were exercised. The weighted average share price on exercise for awards exercised in the
prior year was £2.82.
These options are valued using a binomial pricing model. The value of the awards was expensed over the period from the date of
grant to the vesting date.
b) Deferred Bonus Plan
Details of the share awards in issue and the movements in the year are given below:
Number at Number at
1 March 29 February Exercise price
Share scheme
2023
Granted
Exercised
Forfeited
2024
(pence)
Exercisable
Jul-20
2,833,067
–
(2,763,777)
(69,290)
–
nil
July 2023
Nov-20
315,975
–
(315,975)
–
–
nil
November 2023
Jun-21
1,172,051
–
–
(59,162)
1,112,889
nil
June 2024
Nov-21
239,415
–
–
–
239,415
nil
November 2024
Sep-22
934,694
–
–
(54,850)
879,844
nil
June 2025
Jan-23
400,679
3,568
(51,013)
(5,516)
347,718
nil
June 2025
Feb-23
137,132
–
–
(15,188)
121,944
nil
June 2025
Dec-23
– 1
,6
47, 204
–
–
1,647, 204
nil
July 2026
Deferred Bonus Plan
6,033,013
1,650,772
(3,130,765)
(204,006)
4,349,014
The weighted average share price on exercise for awards exercised during the year was £2.82 (2023: £3.32). The weighted
average share price at grant date for awards granted during the year was £2.75 (2023: £2.98).
Under the DBP, sufficient shares to satisfy each award are bought over the course of the vesting period and held in an employee
trust (“ESOP”) until vesting. As at 29 February 2024, the ESOP held 2,303,211 ordinary shares (2023: 3,587,130). The ESOP holding is
in line with expectations of how many shares will be needed to satisfy the current awards under this scheme. This amount is net of
expected lapses in the scheme and the fact that recipients typically forego sufficient shares in order to satisfy the associated tax
liability that arises on their vesting.
Braemar Plc Annual Report and Accounts 2024
142
5 Employee remuneration schemes continued
5.2 Share-based payments continued
c) Restricted Share Plan
Details of the RSP share awards in issue and the movements in the year are given below:
Number at Number at
1 March 29 February
Share scheme
2023
Granted
Exercised
Lapsed
2024
Exercisable between
July 2014
13,750
–
(7,
50 0)
–
6,250
Jul 17 – Jul 24
August 2015
12,500
–
–
–
12,500
Aug 18 – Aug 25
Restricted Share Plan
26,250
–
( 7,500)
–
18,750
The weighted average share price on exercise for awards exercised during the year was £2.71 (2023: £3.32).
The fair value of the £nil cost options is approximated to the share price at the time of grant less the expected dividend to be paid
during the vesting period.
The value of the awards is expensed over the period from the date of grant to the vesting date or if used as a recruitment
incentive, from the date of joining to the vesting date. The awards are satisfied by the issue of new shares.
d) Long-Term Incentive Plan (“LTIP”)
The Company also has LTIP awards, which allow for the form of a conditional right to receive shares at £nil cost. The awards
normally vest over three years and are subject to various performance conditions based on earnings per share (“EPS”) or
segmental operating profit.
Details of the LTIP share awards in issue and the movements in the year are given below:
Number at Number at
1 March 29 February
Share scheme
2023
Granted
Exercised
Lapsed
Forfeited
2024
Exercisable between
LTIP 2018
33,294
–
–
–
–
33,294
May 23 – Oct 28
LTIP 2019
202,853
–
–
–
(36,653)
166,200
Jul 24 – Jul 29
LTIP 2020
375,000
–
–
–
–
375,000
Jul 25 – Jul 30
LTIP 2021
389,379
–
–
–
(88,495)
300,884
Jun 26 – Jun 31
LTIP 2022 (granted FY23)
624,174
–
–
–
(78,326)
545,848
Jul 27 – Jul 32
LTIP 2023
–
369,958
–
–
–
369,958
Long-Term Incentive Plan
1,624,700
369,958
–
–
(203,474)
1,791,184
The weighted average share price at grant date for awards granted during the year was £2.75 (2023: £3.14).
The fair value of the LTIP 2021 award which has a TSR-based vesting condition has been calculated using a Monte Carlo
simulation. The fair value of the other LTIPs is determined based on the share price at the time of grant less the expected dividend
to be paid during the vesting period calculated using the market consensus dividend yield.
The value of the awards is recognised as an expense over the period from the date of grant to the vesting date. The awards are
satisfied by the issue of new shares.
e) Other share-based payments
On 5 December 2022, 253,434 shares were awarded as a joining incentive to certain employees of Madrid Shipping Advisors SL
and on 16 December 2022, 1,016,121 shares were issued to the former owners of Southport as part of the acquisition. In addition,
on the acquisition of Southport, a further 872,821 shares were awarded to key employees of Southport. The fair value of the awards
is determined based on the share price at the time of grant less the expected dividend to be paid during the three-year vesting
period calculated using the market consensus dividend yield.
The value of the awards is recognised as an expense over the period from the date of grant to the vesting date. The Southport
Maritime Inc. awards will be satisfied by the issue of new shares.
Number at Number at
1 March 29 February
Share award
2023
Granted
Exercised
Lapsed
Forfeited
2024
Vesting
Southport Maritime Inc.
1,888,942
–
–
–
–
1,888,942
Dec 25
Madrid Shipping Advisors SL
253,434
–
–
–
–
253,434
Dec 23 – Dec 25
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
143
Strategic Report Governance Financial Statements
6 Share capital and other reserves
6.1 Share capital
Ordinary shares
Ordinary shares
2024 2023 2024 2023
Number Number £’000 £’000
Authorised
Ordinary shares of 10 pence each
34,903,000
34,903,000
3,490
3,490
Ordinary shares
Ordinary shares
Share premium
2024 2023 2024 2023 2024 2023
Number Number £’000 £’000 £’000 £’000
Issued
Fully paid ordinary shares of 10 pence each
As at start of year
32,924,877
32,200,279
3,292
3,221
53,796
53,030
Capital reduction
–
–
–
–
(53,796)
–
Shares issued and fully paid (see below)
–
724,598
–
71
–
766
As at end of year
32,924,877
32,924,877
3,292
3,292
–
53,796
In the prior year, in connection with setting up a broker team in Madrid, 253,434 shares were issued to certain employees as a
joining incentive; and 37,636 shares were issued to settle part of the deferred consideration payable in respect of the acquisition
of Naves.
No shares remained unpaid at 29 February 2024 or 28 February 2023.
The Company has one class of ordinary shares which carry no right to fixed income.
6.2 Dividends
Amounts recognised as distributions to equity holders in the year:
2024 2023
£’000 £’000
Ordinary shares of 10 pence each
Final dividend of 8.0 pence per share for the year ended 28 February 2023 (2023: 7.0 pence per share)
2,440
2,018
Interim dividend (2023: 4.0 pence per share)
–
1,172
2,440
3,190
The dividends paid by the Group during the year ended 29 February 2024 totalled £2.4 million (8.0 pence per share) relating to a
final dividend in respect of the year ended 28 February 2023 paid on 9 February 2024. An interim dividend of £1.2 million (4.0 pence
per share) was paid on 2 April 2024.
The right to receive dividends on the shares held in the ESOP has been waived (see Note 6.3). The dividend saving through the
waiver is £0.2 million (2023: £0.4 million).
During the year ended 28 February 2023, the Group paid dividends totalling £3.2 million (11.0 pence per share), being a final
dividend in respect of the year ended 28 February 2022 of £2.0 million (7.0 pence per share) paid on 14 October 2022 and an
interim dividend for the year ended 28 February 2023 of £1.2 million (4.0 pence per share) paid on 4 January 2023.
In December 2022, the Company commenced a project to research various options for increasing the distributable reserves
available to the Company in order to support the stated progressive dividend policy. After the payment of an interim dividend in
January 2023, the outcome of the research identified an accounting practice of the Company used since IFRS 2 was introduced in
2005, which carried realised gains which could only be used in very limited circumstances with the consequence that a significant
balance within retained earnings (that was not previously identified as created by unrealised gains) was incorrectly used by the
Company in the calculation of distributable reserves.
Dividends paid between 2016 and 2023 were therefore paid by the Company without having sufficient distributable reserves
from which to lawfully pay them. Having identified these issues, to rectify the gap in retained earnings and the unlawful payment
of dividends, after the Balance Sheet date, the Company reduced its share premium account and capital redemption reserve
and capitalised and reduced £19.8 million of the merger reserve (“Capital Reduction”) and entered into releases from liability for
the benefit of shareholders and directors (to ensure that no person was disadvantaged as a consequence of the payment of
unlawful dividends).
Braemar Plc Annual Report and Accounts 2024
144
6 Share capital and other reserves continued
6.2 Dividends continued
On 15 February 2023 the Company entered into deeds of release in favour of shareholders receiving the unlawful dividends and
the directors of the Company at the time the unlawful dividends were paid. These releases were conditional on various conditions
including, shareholder approval for the Capital Reduction, the Capital Reduction becoming effective, and the terms of the deeds of
release for shareholders and directors. At a General Meeting of the Company on 14 April 2023, shareholders approved the Capital
Reduction and the deeds of release for shareholders and directors which allowed the Company to proceed with the process for
the Capital Reduction by seeking approval from the High Court of Justice. On 9 May 2023 the High Court approved and confirmed
the Capital Reduction and on 5 June 2023 the Capital Reduction became effective providing the Company with £73.9 million of
distributable reserves at that time.
For the year ended 29 February 2024, a final ordinary dividend of 9 . 0 pence per share has been proposed totalling £3.0 million.
6.3 ESOP reserve
An Employee Share Ownership Plan (“ESOP”) was established on 23 January 1995. The ESOP has been set up to purchase
shares in the Company. These shares, once purchased, are held in trust by the Trustee of the ESOP, SG Kleinwort Hambros Trust
Company (CI) Limited, for the benefit of the employees. Additionally, an Employee Benefit Trust (“EBT”) previously run by ACM
Shipping Group plc also holds shares in the Company. The ESOP and EBT are accounted for within the Company accounts.
The ESOP reserve represents a deduction from shareholders’ funds and a reduction in distributable reserves. The deduction equals
the net purchase cost of the shares held in trust by the ESOP. Shares allocated by the ESOP to satisfy share awards issued by the
Group are released at cost on a First in First Out basis.
Group and Company £’000
At 28 February 2022
6,771
Shares acquired by the ESOP
7,963
ESOP shares allocated
(4,127)
At 28 February 2023
10,607
Shares acquired by the ESOP
6,125
ESOP shares allocated
(9,592)
At 29 February 2024
7,140
As at 29 February 2024, the ESOP held 2,303,211 (2023: 3,579,630) ordinary shares of 10 pence each. The funding of the purchase
has been provided by the Company in the form of a gift and the Trustees have contracted with the Company to waive the ESOP’s
right to receive dividends. The fees charged by the Trustees for the operation of the ESOP are paid by the Company and charged
to the Income Statement as they fall due.
As part of the acquisition of ACM Shipping Group plc in July 2014, the Company issued 125,621 shares into an Employee Benefit
Trust (“EBT”) previously run by ACM Shipping Group plc. As at 29 February 2024, the EBT held 62,290 (2023: 62,290) ordinary
shares of 10 pence each.
The total cost to the Company of shares and cash held in the ESOP and EBT at 29 February 2024 was £7.1 million (2023: £10.6
million) including stamp duty associated with the purchase. The shares owned by the ESOP and EBT had a market value at 29
February 2024 of £6.3 million (2023: £10.9 million). The distribution of these shares is determined by the Remuneration Committee.
3,440,115 shares (2023: 1,877,473) have been released to employees during the year. The shares acquired by the ESOP had an
aggregate cost of £6.1 million (2023: £8.0 million).
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
145
Strategic Report Governance Financial Statements
6.4 Other reserves
Foreign
Capital currency
redemption Merger translation Hedging
reserve reserve reserve reserve Total
£’000 £’000 £’000 £’000 £’000
At 28 February 2022
396
24,641
1,626
(533)
26,130
Cash flow hedges:
– Transfer to income statement
–
–
–
4,826
4,826
– Fair value gain/losses in the period
–
–
–
(4,438)
(4,438)
Investment hedge
–
–
(124)
–
(124)
Exchange differences
–
–
2,522
–
2,522
Deferred tax on items taken to equity
–
–
–
(97)
(97)
At 28 February 2023
396
24,641
4,024
(242)
28,819
Cash flow hedges:
– Transfer to income statement
–
–
–
(2,231)
(2,231)
– Fair value gain/losses in the period
–
–
–
3,872
3,872
Investment hedge
–
–
249
–
249
Exchange differences
–
–
(1,783)
–
(1,783)
Capital reduction
(396)
(19,755)
–
–
(20,151)
Deferred tax on items taken to equity
–
–
–
(410)
(410)
At 29 February 2024
–
4,886
2,490
989
8,365
The capital redemption reserve arose on previous share buy-backs by the Company. The merger reserve arose on transactions
where the Company issued shares pursuant to an arrangement to acquire more than a 90% interest in another company and no
share premium was recorded. The merger reserve arose principally in 2001 in relation to the acquisitions of Braemar Shipbrokers
Limited and Braemar Tankers Limited. Further additions have arisen in respect of Naves and Atlantic Brokers. The amounts in the
merger reserve are unrealised profits relating to the corresponding assets acquired by the Company on the issue of shares. These
profits may become realised on the disposal or write-down of these assets. During the year, following the Capital Reduction (see
Note 6.2), the merger reserve was reduced by £19.8 million and the capital redemption reserve was reduced to £nil.
The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments
relating to hedged transactions that have not yet occurred of £1.3 million asset (2023: £0.3 million liability). The deferred tax
movement recognised in equity in the year was a loss of £410,000 (2023: £97,000 loss).
7 Other supporting notes
7.1 Provisions
Provisions are recognised when the Group has a present obligation (legal or otherwise) as a result of a past event and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate
can be made of the amount of the obligation. If material, the provisions are discounted using an appropriate current post-tax
interest rate.
Short-term provisions for long service leave expected to be settled wholly within twelve months of the reporting date are
measured at the amounts expected to be paid when the liabilities are settled.
The provision for long service leave not expected to be settled within twelve months of the reporting date is measured at the
present value of expected future payments to be made in respect of services provided by employees up to the reporting date.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity
and currency that match, as closely as possible, the estimated future cash outflows .
Braemar Plc Annual Report and Accounts 2024
146
7 Other supporting notes continued
7.1 Provisions continued
Key estimate
Uncertain commission obligations
In June 2023, the board commissioned an independent internal investigation into an historical transaction originating in 2013.
The investigation was overseen by an Investigation Committee chaired by the Group’s non-executive Chairman and was
conducted by an independent specialist forensic accounting firm, and independent external counsel. The investigation was
comprehensive and complex and ultimately encompassed several transactions between 2006 and 2013 which required
further investigation.
As a result of the investigation, the Group has recognised a provision of £2.0 million in relation to the uncertain obligations
connected to a number of the transactions and commission obligations identified as part of the investigation. Of the £2.0
million, £1.7 million relates to an historical unsettled commission payable which was recorded in 2017 upon completion of the
relevant contracts which originated in 2013. This balance was reclassified from trade payables to provisions in the prior year.
During the year, £0.2 million was added to the provision following the return of previously paid amounts connected to the
uncertain commission obligation. While the board cannot forecast with certainty final outcomes in respect of these obligations,
based on the Group’s current information, the amount recognised is the current best estimate of the amount required to settle
the obligations at the balance sheet date, taking into account the risks and uncertainties surrounding the obligations, including
interpretation of specific laws and likelihood of settlement.
As the ultimate potential obligations and outcomes are uncertain in relation to the transactions subject to the internal
investigation, there remains a risk that the final outcomes could materially impact the recognised balance within the next
or in future financial years. It is impracticable to provide sensitivity estimates of potential downside variances at this time.
Uncertain
commission
Dilapidations obligation Other Total
£’000 £’000 £’000 £’000
At 28 February 2022
682
–
601
1,283
Reclassification
18
1,707
(346)
1,379
Provided in the year
–
257
462
719
Utilised in the year
–
–
(15)
(15)
Reversal of provision in the year
(124)
–
–
(124)
Exchange differences
16
–
51
67
At 28 February 2023
592
1,964
753
3,309
Provided in the year
20
–
–
20
Provision added in year
–
209
–
209
Utilised in the year
–
–
(134)
(134)
Reversal of provision in the year
–
–
(154)
(154)
Exchange differences
(7)
(79)
(26)
(112)
At 29 February 2024
605
2,094
439
3,138
Current
547
2,094
439
3,080
Non-current
58
–
–
58
At 29 February 2024
605
2,094
439
3,138
Dilapidations relate to future obligations to make good certain office premises upon expiration of the lease term. The provision is
calculated with reference to the location and square footage of the office.
Employee entitlements of £0.4 million is included in other, which relate to statutory long service leave in Braemar Shipbroking Pty
Limited. This is based on the principle that each Australian employee is entitled to eight weeks of leave over and above any annual
leave on completion of ten years’ continuous service. The provision is calculated with reference to the number of employees who
have at least seven years of continuous service.
7.2 Contingent liabilities
From time to time the Group may be engaged in litigation in the ordinary course of business. The Group carries professional
indemnity insurance. There are currently no liabilities expected to have a material adverse financial impact on the Group’s
consolidated results or net assets.
Notes to the Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
147
Strategic Report Governance Financial Statements
7.3 Related party transactions
During the period the Group entered into the following transactions with joint ventures and investments:
Transactions with wholly owned subsidiaries
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are
not disclosed in this Note.
A list of the Group’s subsidiary undertakings is included in the following table. Unless otherwise indicated, all shareholdings owned
directly or indirectly by the Company represent 100% of the issued share capital of the subsidiary and the share capital comprises
ordinary shares. All entities primarily operate in their country of incorporation.
Subsidiaries
Direct holdings of the Company as at 29 February 2024:
Incorporated in England & Wales
One Strand, Trafalgar Square, London WC2N 5HR
Principal activity
Registration number
Braemar Shipping Group Limited*
Holding company
05990315
Braemar Securities Holdings Limited*
Holding company
10010995
Braemar Financial Holdings Limited*
Holding company
10917096
Braemar Shipbrokers Limited*
Shipbroking
01674710
Seascope Capital Services Limited
Dormant
03592796
Braemar Shipping Services Limited
Dormant
02360525
Braemar Developments Limited
Dormant
02186790
Braemar Tankers Limited
Dormant
02001027
Incorporated in the US
2800
North Loop West, Suite 900, Houston, Texas 77092, US
Principal activity
Registration number
Braemar Holdings (USA) Inc
Holding company
FEIN 81-1568938
2401
PGA Boulevard, Suite 236, Palm Beach Gardens, Florida 33410 US
Principal activity
Registration number
Southport Maritime Inc
Shipbroking
65-0342509
Incorporated in Spain
Madrid, ctra. Humera 43, 6, Spain
Principal activity
Registration number
Madrid Shipping Advisors S.L.
Shipbroking
B10866028
Indirect holdings of the Company as at 29 February 2024:
Incorporated in England & Wales
One Strand, Trafalgar Square, London WC2N 5HR
Principal activity
Registration number
Braemar Shipbroking Group Limited*
Holding company
01611096
Braemar Shipbroking Limited
Shipbroking
01020997
Braemar Shipbroking (Dry Cargo) Limited*
Shipbroking
07223509
A.C.M. Shipping USA Limited*
Shipbroking
08391132
Braemar Valuations Limited*
Valuations
03439765
Braemar Securities Limited
Futures broker
07899358
Braemar Corporate Finance Limited*
Corporate finance
02710842
ACM Shipping CIS Limited
Dormant
06934055
Braemar Maritime Limited
Dormant
03321899
Braemar Burness Maritime Limited
Dormant
03674230
Burness Marine (Gas) Limited
Dormant
01081837
Braemar Pension Trustees Limited
Dormant
05502209
Incorporated in Germany
Domstrasse 17, 20095 Hamburg, Germany
Principal activity
Registration number
Braemar Corporate Finance GmbH
Corporate finance
HRB 114161
Braemar Financial Holdings Germany GmbH
Holding company
HRB 146089
Braemar Plc Annual Report and Accounts 2024
148
Incorporated in United Arab Emirates
Gold Tower, Level 15 Unit 14 D&E, JLT area, Dubai, UAE
Principal activity
Registration number
Braemar Shipbroking DMCC
Shipbroking
DMCC-749556
Incorporated in the US
2800
North Loop West, Suite 900, Houston, Texas 77092, US
Principal activity
Registration number
Braemar Shipbroking (USA) Inc
Shipbroking
46-2641490
Braemar Technical Services (USA) Inc
Energy loss adjuster
76-0036958
24 Grassy Plain Street – Ste 4, Bethel, CT 06801-1700 US
Principal activity
Registration number
Braemar ACM Shipbroking LLP
Shipbroking
1099337
Incorporated in Singapore
80 Robinson Rd, #24-01/02, Singapore 068898
Principal activity
Registration number
Braemar Shipbroking Pte Limited
Shipbroking
200602547M
Braemar Corporate Finance Pte Limited
Corporate finance
2018347
60K
Incorporated in Australia
Level 3, 70 City Road, South Bank, Melbourne, Victoria 3006, Australia
Principal activity
Registration number
Braemar Shipbroking Pty Limited
Shipbroking
ACN 000862 993
ABN 35 000 862 993
Incorporated in other overseas countries
Piazza 2 Giugno No 14, 54033 Carrara, Italy
Principal activity
Registration number
Braemar Seascope Italia SRL
Shipbroking
01268770458
Suite 2009,
Building C Luneng International Center,
No.211, GuoYoa Road, Pudong District, Shanghai, 200126, China
Principal activity
Registration number
Braemar Seascope (Shanghai) Limited
Shipbroking
913100005588064761
2nd Floor, Building No. 22, Pushp Vihar, Commercial Complex,
Madangir, New Delhi – 110 062, India
Principal activity
Registration number
Braemar ACM Shipbroking India Private Limited (49.9% owned)
Shipbroking
U63090DL2003PTC120247
1
Office No. 1004, 10th Floor, Dalamal House, 206-Jamanalal Bajaj Road,
Nariman Point, Mumbai-400021, India
Principal activity
Registration number
ACM Shipping India Limited
Dormant
U93090MH2006FLC164019
1
The Group has a 49.9% legal ownership of Braemar ACM Shipbroking India Private Limited, but has a 100% economic interest and control of the entity through
other contractual arrangements.
Subsidiaries marked with an asterisk (*) are exempt from the requirements of the Companies Act 2006 relating to the audit of
individual accounts by virtue of section 479A of the Companies Act 2006 for the financial year ended 29 February 2024. The
Company has provided a guarantee of all outstanding liabilities to which these subsidiaries were subject as at 29 February 2024
in accordance with section 479C of the Companies Act 2006.
7.4 Events after the reporting date
The Company paid an interim dividend of £1.2 million (4p per share) on 2 April 2024. There were no other adjusting or significant
non-adjusting events between the reporting date and the date these Financial Statements were authorised.
Notes to the Financial Statements continued
7 Other supporting notes continued
7.3 Related party transactions continued
Braemar Plc Annual Report and Accounts 2024
149
Strategic Report Governance Financial Statements
Company Balance Sheet
As at 29 February 2024
Notes
As at
29 Feb 2024
£’000
As at
28 Feb 2023
£’000
Assets
Non-current assets
Intangible assets 5 217 422
Property, plant and equipment 6 723 2,004
Investments 8 126,865 119,539
Deferred tax assets 9 734 844
Derivative financial instruments 15 291 –
Other long-term receivables 10 15,141 13,732
143,971 136,541
Current assets
Other receivables 11 3,617 8,442
Derivative financial instruments 15 294 1,183
Cash and cash equivalents 12 2,712 2,174
6,623 11,799
Total assets 150,594 148,340
Liabilities
Current liabilities
Other payables 13 57,145 60,010
Convertible loan notes 15 658 703
Derivative liabilities 15 294 42
Provisions 16 417 –
58,514 60,755
Non-current liabilities
Other payables 13 518 868
Long-term borrowings 14 26,975 28,744
Convertible loan notes 15 2,344 2,899
Derivative liabilities 15 431 554
Provisions 16 – 417
30,268 33,482
Total liabilities 88,782 94,237
Total assets less total liabilities 61,812 54,103
Equity
Share capital 17 3,292 3,292
Share premium 17 – 53,796
ESOP reserve 19 (7,140) (10,607)
Other reserves 20 3,611 23,762
Retained earnings/(deficit) 62,049 (16,140)
Total equity 61,812 54,103
In accordance with the exemptions allowed by Section 408 of the Companies Act 2006, the Company has not presented its own
profit and loss account. The profit for the Parent Company for the year was £9,026,000 (2023: loss of £25,694,000) has been dealt
with in the Financial Statements of the Company.
The accompanying notes on pages 151-161 form an integral part of these Financial Statements.
The Financial Statements of Braemar Plc on pages 149-161 were approved by the board of directors on 22 May 2024 and were
signed on its behalf by:
James Gundy Grant Foley
Group Chief Executive Officer Group Chief Financial Officer Registered number: 02286034
Braemar Plc Annual Report and Accounts 2024
150
Company Statement of Changes in Total Equity
For the year ended 29 February 2024
Notes
Share
capital
£’000
Share
premium
£’000
ESOP
reserve
£’000
Other
reserves
£’000
Retained
earnings/
(deficit)
£’000
Total
equity
£’000
At 1 March 2022 3,221 53,030 (6,771) 23,762 11,633 84,875
Loss for the year – – – – (25,694) (25,694)
Dividends paid – – – – (3,190) (3,190)
Issue of shares 71 766 – – – 837
Own shares acquired – – (7,963) – – (7,963)
Issue of shares held by ESOP – – 4,127 – (3,650) 477
Share-based payments – – – – 4,520 4,520
Deferred tax credit on share
awards – – – – 241 241
At 28 February 2023 3,292 53,796 (10,607) 23,762 (16,140) 54,103
Profit for the year – – – – 9,026 9,026
Dividends paid 4 – – – – (2,440) (2,440)
Capital reduction 17, 20 – (53,796) – (20,151) 73,947 –
Own shares acquired 19 – – (6,125) – – (6,125)
Issue of shares held by ESOP 19 – – 9,592 – (8,766) 826
Share-based payments – – – – 6,442 6,442
Cash paid for share-based
payments – – – – (52) (52)
Tax on share awards – – – – 32 32
At 29 February 2024 3,292 – (7,140) 3,611 62,049 61,812
The accompanying notes on pages 151-161 form an integral part of these Financial Statements.
Braemar Plc Annual Report and Accounts 2024
151
Strategic Report Governance Financial Statements
Notes to the Company Financial Statements
General information
The separate Financial Statements of Braemar Plc for the year ended 29 February 2024 were authorised for issue in accordance
with a resolution of the directors on 22 May 2024. Braemar Plc is a public limited company incorporated in England and Wales, and
its principal activity is a holding company for the shipbroking business.
The term “Company” refers to Braemar Plc.
1 Material accounting policies
a) Basis of preparation
The Company Financial Statements have been prepared in accordance with United Kingdom Generally Accepted Practice,
including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting
Practice). No Income Statement is presented for Braemar Plc as permitted by Section 408 of the Companies Act 2006.
The Financial Statements have been prepared under the historic cost convention except for items measured at fair value as set
out in the accounting policies below and have been prepared on a going concern basis.
The Company Financial Statements are presented in sterling and all values are rounded to the nearest thousand sterling (£’000)
except where otherwise indicated.
FRS 101
The Financial Statements of the Company have been prepared in accordance with FRS 101 Reduced Disclosure Framework. The
Company has applied the exemptions available under FRS 101 in respect of the following disclosures:
– a cash flow statement and related notes;
– certain information as per IAS 1 Presentation of Financial Statements;
– comparative period reconciliations for share capital;
– disclosures in respect of transactions with wholly owned subsidiaries;
– disclosures in respect of capital management;
– the effects of new but not yet effective IFRSs; and
– disclosures in respect of the compensation of key management personnel.
As the Consolidated Financial Statements of the Group on pages 90-148 include the equivalent disclosures, the Company has also
taken the exemptions under FRS 101 available in respect of the following disclosures:
– IFRS 2 “Share-based Payment” in respect of Group-settled share-based payments;
– certain disclosures required by IFRS 13 “Fair Value Measurement”; and
– the disclosures required by IFRS 7 “Financial Instrument Disclosures.
b) Going concern
The 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 going concern assumption for the Company is considered together with the going
concern assumption for the Group; see Note 1 to the Consolidated Financial Statements for more detail.
c) Use of estimates and critical judgements
The preparation of the Company’s Financial Statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the
reporting date. Estimates and judgements are continually evaluated based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may
differ from these estimates and assumptions.
The following table provides a summary of the Company’s significant estimates and judgements, along with the location of more
detailed information relating to those judgements.
Judgement applied to
Judgements
excluding
estimates Estimates Location of further information
Investments in subsidiaries Yes Note 8 – Investments
Preference share assets Yes Yes Note 10 – Other long-term receivables
Provision for impairment of
amounts due from subsidiaries
Yes Note 10 – Other long-term receivables
Measurement of deferred and
contingent consideration receivable
Yes Note 4.8 – Deferred and contingent consideration
receivable to the Consolidated Financial Statements
Share option vesting Yes Note 5.2 – Share-based payments to the Consolidated
Financial Statements
Braemar Plc Annual Report and Accounts 2024
152
1 Significant accounting policies continued
d) Accounting policies
The Company’s accounting policies are the same as the accounting policies of the consolidated Group described on pages 95-
148 except for the policies described in the respective notes below.
2 Profit/loss for the year
As permitted by Section 408 of the Companies Act 2006, the Company has elected not to present its own statement of
comprehensive income (including the profit and loss account) for the year.
The auditor’s remuneration for audit services to the Company is disclosed in Note 2.6 to the Consolidated Financial Statements.
All fees paid to the auditor were charged to operating loss/profit in both years.
3 Staff costs
Staff costs for the Company during the year (including directors) are provided in the table below.
2024
£’000
2023
£’000
Salaries, wages and short-term employee benefits 2,445 2,391
Other pension costs 70 46
Social security costs 272 764
Share-based payments 548 1,264
3,335 4,465
The numbers above include remuneration and pension entitlements for each director. Details are included in the Directors’
Remuneration Report on pages 62-78.
The average number of full-time employees of the Company was 7 (2023: 6).
4 Dividends
Amounts recognised as distributions to equity holders in the year are detailed in Note 6.2 to the Consolidated Financial Statements.
Certain dividends paid between 2016 and 2023 were paid by the Company without having sufficient distributable reserves
from which to lawfully pay them. The Company has rectified its position with respect to these dividends; refer to Note 6.2 to the
Consolidated Financial Statements for further details.
5 Intangible assets
Computer
software
£’000
Cost
At 28 February 2022 1,054
Additions 74
Disposal (87)
At 28 February 2023 and 29 February 2024 1,041
Accumulated amortisation and impairment
At 28 February 2022 427
Charge for the year 132
Impairment 60
At 28 February 2023 619
Charge for the year 205
At 29 February 2024 824
Net book value at 29 February 2024 217
Net book value at 28 February 2023 422
At 29 February 2024, the Company had no contractual commitments for the acquisition of computer software (2023: £nil).
Notes to the Company Financial Statements continued
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153
Strategic Report Governance Financial Statements
6 Property, plant and equipment
Land and
buildings
£’000
Computers
£’000
Fixtures and
equipment
£’000
Total
£’000
Cost
At 28 February 2022 8,988 220 17 9,225
Additions at cost – 7 – 7
Disposals
1
(2,161) – – (2,161)
At 28 February 2023 6,827 227 17 7,071
Additions at cost – 7 11 18
At 29 February 2024 6,827 234 28 7,089
Accumulated depreciation and impairment
At 28 February 2022 5,289 30 15 5,334
Charge for the year 1,244 55 2 1,301
Disposals
1
(1,568) – – (1,568)
At 28 February 2023 4,965 85 17 5,067
Charge for the year 1,241 57 1 1,299
At 29 February 2024 6,206 142 18 6,366
Net book value at 29 February 2024 621 92 10 723
Net book value at 28 February 2023 1,862 142 – 2,004
1 The disposal in the prior year primarily relates to the Bevis Marks premises assigned to Beat Capital by the Company. As part of the arrangement, a payment of
£0.9 million was made in relation to the outstanding lease liability. The disposal resulted in the derecognition of land and buildings of £0.5 million net book value
and the transfer of £0.5 million of the lease liability resulting in no gain or loss in the year.
The land and buildings category includes land and buildings held under leases and leasehold improvements. At 29 February 2024,
the Company had no contractual commitments for the acquisition of property, plant and equipment (2023: £nil).
7 Leases
The Company as a lessee
The Company primarily leases property in relation to offices. At inception of a lease contract, the Company assesses whether the
contract conveys the right to control the use of an identified asset for a certain period of time and whether it obtains substantially
all the economic benefits from the use of that asset, in exchange for consideration. The Company recognises a lease liability and
a corresponding right-of-use asset with respect to all lease arrangements in which it is a lessee, except low-value leases and
short-term leases of 12 months or less, costs for which are recognised as an operating expense within the income statement on a
straight-line basis.
A right-of-use asset is capitalised on the Balance Sheet at cost, comprising the amount of the initial measurement of the lease
liability and lease payments made at or before the commencement date, plus any initial direct costs incurred in addition to an
estimate of costs to remove or restore the underlying asset. Where a lease incentive is receivable, the amount is offset against
the right-of-use asset at inception. Right-of-use assets are depreciated using the straight-line method over the shorter of the
estimated life of the asset or the lease term.
The lease liability is initially measured at the present value of future lease payments. Interest expense is charged to the income
statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Company’s
incremental borrowing rate is used, being the rate that the Company would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions. Generally, the interest rate implicit in
the lease is not readily determinable, as such the incremental borrowing rate is used to discount future lease payments.
For the Company, lease payments generally comprise the following:
− Fixed payments, less any lease incentives receivable; and
− Payments to be made under extension options which are reasonably certain to be exercised.
Contracts entered into by the Company have a wide range of terms and conditions but generally do not impose any additional
covenants. Contracts entered into by the Company include extension or termination options which provide the Company with
additional operational flexibility.
Braemar Plc Annual Report and Accounts 2024
154
7 Leases continued
The Company as a lessee continued
If the Company considers it reasonably certain that an extension option will be exercised or a termination option not exercised, the
additional period is included in the lease term.
A modification to a lease which changes the lease payment amount (e.g. due to a renegotiation or market rent review) or amends
the term of the lease, results in a reassessment of the lease liability with a corresponding adjustment to the right-of-use asset.
The Company as a lessor
The Company classifies leases as either operating or finance leases based on the substance of the arrangement. At
commencement of a finance lease, a receivable is recognised at an amount equal to the Company’s net investment in the lease.
Finance income is recognised reflecting a constant periodic rate of return on the net investment in the lease. Lease payments from
operating leases are recognised as income on a straight-line basis.
Right-of-use assets
Land and
buildings
£’000
Fixtures and
equipment
£’000
Total
£’000
At 28 February 2022 3,443 – 3,443
Amortisation (1,168) – (1,168)
Disposal (527) – (527)
At 28 February 2023 1,748 – 1,748
Additions – 11 11
Amortisation (1,165) – (1,165)
At 29 February 2024 583 11 594
Lease liabilities
Land and
buildings
£’000
Fixtures and
equipment
£’000
Total
£’000
At 28 February 2022 6,631 – 6,631
Interest expense 125 – 125
Lease payments (3,080) – (3,080)
Disposal
1
(650) – (650)
At 28 February 2023 3,026 – 3,026
Additions – 11 11
Interest expense 57 – 57
Lease payments (2,154) – (2,154)
At 29 February 2024 929 11 940
1 Refer to Note 6 Property, plant and equipment for the details of the disposal.
Lease receivables
Gross
£’000
Provision
£’000
Net
£’000
At 28 February 2022 1,512 (15) 1,497
Interest received 35 – 35
Lease payments (642) – (642)
Movement in provision – 6 6
Disposal (38) – (38)
At 28 February 2023 867 (9) 858
Interest received 16 – 16
Lease payments (643) – (643)
Movement in provision – 9 9
Disposal – – –
At 29 February 2024 240 – 240
There was no short-term lease expense, no short-term lease income and no low-value lease expense in the year (2023: £nil).
Notes to the Company Financial Statements continued
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155
Strategic Report Governance Financial Statements
Lease liabilities
Up to
3 months
£’000
Between
3 and 12
months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over
5 years
£’000
Total
£’000
Unearned
interest
£’000
Net
payable
£’000
At 29 February 2024 468 469 3 6 – 946 (6) 940
At 28 February 2023 539 1,615 934 – – 3,088 (62) 3,026
Lease receivables
Up to
3 months
£’000
Between
3 and 12
months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over
5 years
£’000
Total
£’000
Unearned
interest
£’000
Provision
£’000
Net
receivable
£’000
At 29 February 2024 134 107 – – – 241 (1) – 240
At 28 February 2023 160 482 245 – – 887 (20) (9) 858
8 Investments
Key estimate
Investments in subsidiaries
The Company recognises provisions for impairment of investments in subsidiaries based on management’s judgement of
whether or not there is an indication of impairment at the Balance Sheet date. A judgement is made based on the net assets,
cash balance and future trading performance of the subsidiary.
Investments
Investments in subsidiaries, associates and joint ventures are held at cost less accumulated impairment. Where there is objective
evidence that the investment in subsidiaries, associates and joint ventures has been impaired, the carrying amount of the
investment is tested for impairment in the same way as other non-financial assets.
For share awards granted to employees of subsidiary companies, the IFRS 2 charge is recognised as an increase of the
Company’s investment in the relevant subsidiaries.
Investments where the Company has no significant influence are held at fair value, with movements in fair value recorded in profit
and loss.
Subsidiaries
£’000
Unlisted
investments
£’000
Total
£’000
Cost
At 1 March 2022 (restated)
1
107,839 1,500 109,339
Additions 7,894 – 7,894
Share-based payments 3,256 – 3,256
At 28 February 2023 118,989 1,500 120,489
Additions 1,579 – 1,579
Fair value loss – (147) (147)
Share-based payments 5,894 – 5,894
At 29 February 2024 126,462 1,353 127,815
Impairment
At 1 March 2022 and 28 February 2023 (restated)
1
950 – 950
At 29 February 2024 950 – 950
Net book value at 29 February 2024 125,512 1,353 126,865
Net book value at 28 February 2023 118,039 1,500 119,539
1 Following a review of the gross cost and gross accumulated impairment amounts, the Company has restated the opening gross cost and gross impairment
amount to reduce both by £9.6 million to reflect disposals of investments in prior years for which the gross amounts had not been reduced. There is no impact
on the Company’s profit or loss or movements in investments the current and prior years.
Braemar Plc Annual Report and Accounts 2024
156
8 Investments continued
Additions in the prior year represent an investment made on the acquisition of Southport Maritime Inc. of £6.5 million and an
investment made in respect of Madrid Shipping Advisors S.L. of £1.4 million. The addition in current year represent a further
investment made in respect of Madrid Shipping Advisors S.L. of £1.6 million. The payments are subject to claw-back conditions
linked to continuous employment within the Group which are treated as a cost of investment by the Company, but treated as
prepayments for future service in the Group accounts.
The Company invested £5.9 million (2023: £3.3 million) in the subsidiaries of the Group in respect of share-based payment charges
incurred in the year.
The carrying value of the Company’s investments in subsidiary undertakings are reviewed for indicators of impairment on an
annual basis. In the event impairment indicators are identified, the recoverable amount is determined based on a value-in-use
calculation which requires the determination of appropriate assumptions in relation to cash flows over a forecast period, the
long-term growth rate to be applied beyond this period and the risk-adjusted discount rate used to discount the estimated cash
flows to present value. There are no indicators of impairment in relation to the Company’s investments measured at cost less
accumulated impairment.
The Company’s principal investment in Braemar Financial Holdings Limited is held as preference shares; see Note 10 for
furtherinformation.
A list of subsidiary undertakings is included in Note 7.3 of the Consolidated Financial Statements.
The Financial Statements of the principal subsidiary undertakings are prepared to 29 February 2024.
Unlisted investments
The Company’s unlisted investments include 1,000 (2023: 1,000) ordinary £1 shares in London Tanker Broker Panel. The unlisted
investment primarily relates to the Company’s investment in the London Tanker’s Broker Panel. In the prior year the investment was
carried at fair value, based on the value of the most recent comparable transaction and was therefore classified as Level 2 in the
fair value hierarchy. Due to the time which has passed since the most recent comparable market transaction, the Company has
valued the investment in the current year based on an income approach which has resulted in the fair value being deemed to be in
level 3 of the fair value hierarchy. The Company’s policy is that the beginning of the financial year is considered the date of transfer
between levels in the fair value hierarchy. The significant unobservable input into the valuation are:
- a discount rate of 16.4%; and
- expected income from the investment.
An increase in the discount rate of 2% would result in an increased fair value loss of £0.1 million recognised in the Income
Statement, while a decrease in the discount rate of 2% would result in a gain of £0.2 million recognised in the Income Statement.
A 10% increase/decrease in expected income would result in a £0.1 million gain/loss.
The following table provides a reconciliation of movements in level 3 financial assets during the year:
Unlisted
investment
£’000
Opening fair value –
Transfer into level 3 1,500
Unrealised fair value loss recognised in operating costs (147)
Total 1,353
9 Deferred tax
The movement in the deferred tax asset
Accelerated
Capital
allowances
Employee
benefits
Total
£’000
Balance at 1 March 2023 (35) 879 844
Credit for the year to profit or loss 12 17 29
Credit for the year to reserves – (139) (139)
Balance at 29 February 2024 (23) 757 734
A deferred tax asset of £0.7 million (2023: £0.8 million) has been recognised as the directors believe that it is probable that there
will be sufficient taxable profits in the UK tax group in the future to recover the asset in full.
Notes to the Company Financial Statements continued
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157
Strategic Report Governance Financial Statements
10 Other long-term receivables
Key estimate
Preference share assets
The Company holds investments in preference shares issued by a subsidiary at fair value through profit and loss and are
classified as level 3 in the IFRS 13 fair value hierarchy. The preference shares are not traded in any market and there are no
similar assets in quoted markets. Therefore, the Company performs a valuation based on the present value of future cashflows
using unobservable (“Level 3”) inputs. The Company develops unobservable inputs using the best information available in
the circumstances, which include the Group’s forecasts of cash flows for the underlying businesses of the holding company
issuing the preference shares using a risk-adjusted discount rate. See also accounting policies Note 1 (d).
The key estimates are therefore the selection of suitable discount rates and the estimation of future growth rates which vary
between cash-generating units depending on the specific risks and the anticipated economic and market conditions related
to each cash-generating unit. The discount rates and growth rates are consistent with those applied to the same business in
the Group’s assessment of the impairment of goodwill. See Note 3.1 in the Consolidated Financial Statements for a description
of the approach used by management to determine these key values and the sensitivity analysis on the impairment.
In addition, management makes adjustments for expected working capital requirements with any surplus net current assets
being included in the valuation of the issued preference shares. The estimate of working capital requirement is based on
historical experience as well as forecasts relating to the sub-group.
Provision for impairment of amounts due from subsidiaries
The provision for impairment of amounts due from subsidiaries represents management’s best estimate at the Balance Sheet
date. A number of judgements are made in the calculation of the provision, primarily based on the net assets, cash balance
and expected future trading performance of the subsidiary.
The application of IFRS 9 “Financial Instruments” results in an additional provision for expected credit losses. When measuring
expected credit losses, the Company uses reasonable and supportable forward-looking information, which is based on
assumptions for the future movement of different economic drivers and how these drivers will affect each other. Probability
of default constitutes a key input in measuring expected credit losses. Probability of default is an estimate of the likelihood
of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future
market conditions.
Key judgement
Classification of financial assets
The Company holds investments in preference shares issued by a subsidiary. The preference shares do not provide a
contractual right to unpaid amounts in the event of a bankruptcy of the issuer and therefore, in the judgement of the directors,
the returns do not meet the conditions of being solely payments of principal and interest and are required to be held at fair
value through profit and loss. The valuation of these shares is considered in the use of estimates and critical judgements
above. The preference shares are recognised as amounts due from subsidiaries receivable after more than one year.
Amounts due from subsidiaries
The expected credit losses on amounts due from subsidiaries is assessed under the general approach with reference to changes
in credit quality since initial recognition. An amount due from a subsidiary is considered to be in default and credit impaired when
there is evidence that the subsidiary is in significant financial difficulty such that it will have insufficient liquid assets to repay the
loan. The assessment of a significant increase in credit risk is performed qualitatively by reference to the borrower’s expected cash
flows, liquid asset position and considers the impact of the wider Group’s support.
Notes
2024
£’000
2023
£’000
Amounts due from subsidiary undertakings
Preference shares measured at fair value 7,095 3,576
Other amounts due from subsidiary undertakings 6,453 6,638
Provision for impairment of other amounts due from subsidiary undertakings (249) (258)
Net amounts due from subsidiary undertakings 13,299 9,956
Deferred consideration 1,304 2,540
Contingent consideration 532 1,004
Prepayment 6 –
Finance lease
Finance lease receivables 7 – 241
ECL provision for impairment of finance lease receivables – (9)
Net finance lease receivables – 232
Other long-term receivables 15,141 13,732
Braemar Plc Annual Report and Accounts 2024
158
10 Other long-term receivables continued
Amounts due from subsidiaries
The fair value of the investment in preference shares is based on the value-in-use of the Corporate Finance Division (see Note 3.1 in
the Consolidated Financial Statements), with adjustments to determine a fair value, principally an adjustment for net debt in relation
to balances not forming part of working capital of the entity.
Deferred consideration of £1.3 million and contingent consideration of £0.5 million relates to the non-current element of the earn-
out payments receivable in respect of the disposal of Cory Brothers. The deferred consideration relates to the minimum earnout
payments accounted for on an amortised cost basis. The contingent consideration represents the variable element of the earnout
payments which are contingent on the future gross profit of the newly formed VertomCory agency business, which are recognised
at fair value through profit or loss. Note 4.9 in the Consolidated Financial Statements provides further detail.
See Note 7 for a maturity analysis which reconciles the long-term finance lease receivables to the undiscounted lease receipts and
unearned finance income.
11 Other receivables
Amounts due from subsidiaries
The expected credit losses on amounts due from subsidiaries is assessed under the general approach with reference to changes
in credit quality since initial recognition. An amount due from a subsidiary is considered to be in default and credit impaired when
there is evidence that the subsidiary is in significant financial difficulty such that it will have insufficient liquid assets to repay the
loan. The assessment of a significant increase in credit risk is performed qualitatively by reference to the borrower’s expected cash
flows, liquid asset position and considers the impact of the wider Group’s support.
2024
£’000
2023
£’000
Amounts due from subsidiary undertakings 806 4,881
Deferred consideration 1,316 1,097
Contingent consideration 550 403
Other receivables 456 1,111
Finance lease receivables 240 626
Prepayments 249 324
Total 3,617 8,442
Deferred consideration of £1.3 million and contingent consideration of £0.6 million relates to the current element of the earn out
payments receivable in respect of the disposal of Cory Brothers.
The total receivables balance (including long-term receivables) is denominated in the following currencies.
2024
£’000
2023
£’000
Sterling 11,654 18,589
USD 9 9
Euro 7,095 3,576
Total 18,758 22,174
The Company has no trade receivables (2023: £nil). Amounts due from subsidiary undertakings are interest-free, unsecured and
repayable on demand. The Company provides for impairment using a lifetime expected credit loss provision for amounts due from
subsidiary undertakings.
12 Cash and cash equivalents
2024
£’000
2023
£’000
Cash at bank 2,712 2,174
Cash and cash equivalents largely comprise bank balances denominated in sterling, US dollars, euros and other currencies for the
purpose of settling current liabilities.
The Directors consider that the carrying amounts of these assets approximate to their fair value.
Notes to the Company Financial Statements continued
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159
Strategic Report Governance Financial Statements
13 Other payables
Current liabilities
2024
£’000
2023
£’000
Lease liabilities 931 2,097
Amounts owed to subsidiary undertakings payable within one year 55,341 56,334
Other payables
1
133 751
Accruals 740 828
Total 57,145 60,010
1 In the prior year, a payable of £587,000 in relation to the working capital adjustment on the acquisition of Southport, which also included a service condition,
was included in other payables. This amount was settled in the current year.
Amounts owed to subsidiary undertakings payable within one year are interest-free and unsecured and repayable on demand.
Non-current liabilities
2024
£’000
2023
£’000
Amounts owed to subsidiary undertakings payable after more than one year 220 425
Other long-term payables 298 443
Total 518 868
14 Borrowings
Long-term borrowings
2024
£’000
2023
£’000
Lease liabilities 9 929
Secured revolving credit facilities 26,966 27,815
Total 26,975 28,744
The Company has a revolving credit facility (“RCF”) with HSBC. For further details see ‘Note 4.6 Borrowings’ in the Group’s Financial
Statements. Amounts can be rolled on a monthly basis until the facility expires subject to certain conditions, and on that basis
the borrowings have been classified as non-current. The amounts drawn under the RCF bear interest based on SONIA, SOFR
and EURIBOR from amounts drawn in sterling, US dollars and euros respectively, plus a credit margin dependent on the Group’s
leverage ratio.
15 Convertible loan notes and derivative financial instruments
The Company issued convertible loan notes as part of the acquisition of Naves Corporate Finance GmbH (further details of the
acquisition are provided in Note 4.7 to the Consolidated Financial Statements). The convertible loan notes have been valued at
amortised cost with a derivative liability recognised in respect of the equity conversion feature.
2024
£’000
2023
£’000
Assets
Derivative assets maturing after more than one year 291 1,183
Derivative assets maturing within one year 294 –
Total assets 585 1,183
Liabilities
Issued convertible loan notes maturing within one year 658 703
Issued convertible loan notes maturing after more than one year 2,344 2,899
Derivative liabilities due within one year 294 42
Derivative liabilities due after more than one year 431 554
Total liabilities 3,727 4,198
Braemar Plc Annual Report and Accounts 2024
160
15 Convertible loan notes and derivative financial instrument continued
Financial instruments in relation to the acquisition of Naves
The following table shows amounts in the Company balance sheet relating to the convertible loan notes issued on the acquisition
of Naves. The amounts shown in the table below differ from the similar amounts disclosed in Note 4.7 to the Group’s Consolidated
Financial Statements primarily due to the difference in accounting arising from the employment condition relating to certain of the
instruments issued, which results in different effective interest rates applying at the Group and Company level. At 29 February 2024,
there are no unsatisfied ongoing employment conditions.
2024
£’000
2023
£’000
Current liabilities
Convertible loan notes 658 703
Derivatives – 14
658 717
Non-current liabilities
Convertible loan notes 2,344 2,899
Derivatives 140 370
2,484 3,269
3,142 3,986
16 Provisions
Dilapidations
£’000
At 1 March 2023 and 29 February 2024 417
The Company holds a dilapidations provision of £0.4 million (2023: £0.4 million) which is classified as a current liability (2023: non-
current liability). Dilapidations relate to future obligations to make good certain office premises upon expiration of the lease term.
The provision is calculated with reference to the location and square footage of the office.
17 Share capital and share premium
The Company has one class of ordinary shares which carry no right to fixed income. Note 6.1 to the Consolidated Financial
Statements provides detail on authorised share capital and movements in issued share capital.
18 Share-based payments
The Company operates a number of equity-settled share-based payment schemes for the benefit of the Group’s employees.
No awards may be granted under the schemes set out below which would result in the total number of shares issued or remaining
issuable under all of the schemes, in the ten-year period ending on the date of grant of the option, exceeding 10% of the
Company’s issued share capital (calculated at the date of grant of the relevant option).
All of the Company’s share schemes are accounted for as equity settled share-based payments because they only entitle the
employee to receive equity instrument issued by the Company. For further details relating to share awards issued by the Company
see Note 5.2 to the Consolidated Financial Statements.
19 ESOP reserve
An Employee Share Ownership Plan (“ESOP”) was established on 23 January 1995. The ESOP has been set up to purchase
shares in the Company. These shares, once purchased, are held in trust by the Trustee of the ESOP, SG Kleinwort Hambros Trust
Company (CI) Limited, for the benefit of the employees. Additionally, an Employee Benefit Trust (“EBT”) previously run by ACM
Shipping Group plc also holds shares in the Company. The ESOP and EBT are accounted for within the Company accounts.
The net cost of the shares acquired for the shares held by the ESOP and the EBT are a deduction from shareholders’ funds and
represent a reduction in distributable reserves. Note 6.3 to the Consolidated Financial Statements provides detail on the ESOP and
the EBT and movements in shares to be issued.
Notes to the Company Financial Statements continued
Braemar Plc Annual Report and Accounts 2024
161
Strategic Report Governance Financial Statements
20 Other reserves
Merger reserve
The merger reserve arises on transactions where the Company issues shares pursuant to an arrangement to acquire more than an
90% interest in another company and no share premium is recorded. The amounts in merger reserve are unrealised profits relating
to the corresponding assets acquired by the Company on the issue of shares. These profits may become realised on the disposal
or write-down of these assets.
Capital
redemption
reserve
£’000
Merger
reserve
£’000
Total
£’000
At 1 March 2022 and 28 February 2023 396 23,366 23,762
Capital reduction (396) (19,755) (20,151)
At 29 February 2024 – 3,611 3,611
The capital redemption reserve arose on previous share buy-backs by the Company. The merger reserve arose on transactions
where the Company issued shares pursuant to an arrangement to acquire more than a 90% interest in another company and no
share premium was recorded. The merger reserve arose principally in 2001 in relation to the acquisitions of Braemar Shipbrokers
Limited and Braemar Tankers Limited. Further additions have arisen in respect of Naves and Atlantic Brokers. The amounts in the
merger reserve are unrealised profits relating to the corresponding assets acquired by the Company on the issue of shares. These
profits may become realised on the disposal or write-down of these assets. During the year, following the Capital Reduction (see
Note 6.2 to the Consolidated Financial Statements), the merger reserve was reduced by £19.8 million and the capital redemption
reserve was reduced to £nil.
21 Contingent liabilities and commitments
From time to time the Company may be engaged in litigation in the ordinary course of business. The Company carries professional
indemnity insurance. There are currently no liabilities expected to have a material adverse financial impact on the Company’s
results or net assets.
The Company has issued guarantees to certain subsidiaries in order to exempt them from audit for the year ended 29 February
2024. See Note 7.3 of the Consolidated Financial Statements.
22 Related party transactions
The Company has applied the disclosure exemption of FRS 101 in respect of transactions with wholly owned subsidiaries.
A list of the Company’s subsidiary undertakings is provided in Note 7.3 in the Consolidated Financial Statements.
23 Events after the reporting date
The Company paid an interim dividend of £1.2 million (4p per share) on 2 April 2024. There were no other adjusting or significant
non-adjusting events between the reporting date and the date of authorisation.
Braemar Plc Annual Report and Accounts 2024
162
Five-year financial summary (unaudited)
Consolidated Income Statement
Continuing operations
12 months to
29 Feb 2024
£’000
12 months to
28 Feb 2023
£’000
12 months to
28 Feb 2022
£’000
12 months to
28 Feb 2021
£’000
12 months to
29 Feb 2020
£’000
Group revenue 152,751 152,911 101,310 83,695 117,655
Other operating expenses (136,203) (132,836) (91,250) (75,976) (106,625)
Specific items (net) (7,504) (8,406) (514) (1,097) (3,344)
Total operating expenses (143,707) (141,242) (91,764) (77,073) (109,969)
Operating profit/(loss) 9,044 11,669 9,546 6,622 7,686
Gain on revaluation of investment – – 172 – –
Net interest expense (1,533) (2,195) (1,156) (1,486) (1,853)
Share of associate profit for the period 12 (23) (19) – 436
Profit before taxation 7,523 9,451 8,543 5,136 6,269
Taxation (2,899) (4,855) (1,839) (1,574) 46
Gain/(loss) for the year from discontinued operations – – 7,2 1 5 970 (2,299)
Profit/(loss) after taxation 4,624 4,596 13,919 4,532 4,016
Dividends
Interim 1,222 1,172 610 – 1,564
Final proposed 2,963 2,440 2,254 1,495 –
4,185 3,612 2,864 1,495 1,564
Earnings per ordinary share – pence
Basic – underlying from continuing operations 36.62p 46.22p 23.06p 15.60p 29.45p
Diluted – underlying from continuing operations 29.96p 38.52p 18.79p 12.91p 26.62p
Braemar Plc Annual Report and Accounts 2024
163
Strategic Report Governance Financial Statements
Five-year financial summary (unaudited)
Consolidated Balance Sheet
As at
29 Feb 2024
£’000
As at
28 Feb 2023
£’000
As at
28 Feb 2022
£’000
(restated)
As at
28 Feb 2021
£’000
(restated)
As at
29 Feb 2020
£’000
(restated)
Assets
Non-current assets
Goodwill 71,337 71,407 79,891 83,955 83,812
Other intangible assets 3,185 3,980 997 2,129 2,411
Property, plant and equipment 5,582 5,320 7,078 9,841 11,928
Other investments 1,633 1,780 1,780 1,962 1,962
Investment in associate 713 701 724 3,763 7,3 15
Financial assets – – – – 1,184
Derivative financial instruments 249 30 8 200 –
Deferred tax assets 2,979 4,794 3,713 2,900 3,620
Pension surplus 1,414 1,120 – – –
Other long-term receivables 4,589 8,554 5,636 1,888 2,467
91,681 97,686 99,827 106,638 114,699
Current assets
Trade and other receivables 37,730 43,323 35,792 33,416 39,541
Financial assets – – – 746 –
Derivative financial instruments 1,287 1,224 54 1,573 –
Current tax receivable 2,925 973 – – –
Assets held for sale – – – 436 –
Cash and cash equivalents 27,951 34,735 13,964 14,111 28,749
69,893 80,255 49,810 50,282 68,290
Total assets 161,574 17 7,941 149,637 156,920 182,989
Liabilities
Current liabilities
Derivative financial instruments 175 1,122 688 – 437
Trade and other payables 43,611 57,3 10 39,183 47,83 3 47, 209
Short-term borrowings – – – – 25,116
Current tax payable 1,625 4,141 1,608 1,318 1,334
Provisions 3,080 2,575 486 307 201
Convertible loan notes 632 699 1,416 4,461 4,444
Deferred consideration – – – – 177
Liabilities directly associated with assets classified as held for
sale – – – 125 –
49,123 65,847 43,381 54,044 78,918
Non-current liabilities
Long-term borrowings 29,819 29,919 28,331 31,634 34,585
Deferred tax liabilities 8 344 – 174 903
Derivative financial instruments 183 1,022 335 56 4
Trade and other payables 58 542 – – –
Provisions 416 734 797 690 765
Convertible loan notes 2,346 2,852 2,755 2,681 2,639
Deferred consideration – 495 882 2,293
Pension deficit – – 2,052 3,819 3,672
32,830 35,413 34,765 39,936 44,861
Total liabilities 81,953 101,260 78,146 93,980 123,779
Total assets less total liabilities 79,621 76,681 71,491 62,940 59,210
Equity
Share capital 3,292 3,292 3,221 3,174 3,167
Share premium – 53,796 53,030 52,510 52,510
ESOP reserve (7,140) (10,607) (6,771) (1,362) (2,498)
Other reserves 8,365 28,819 26,130 27,10 0 25,862
Retained earnings 75,104 1,381 (4,119) (18,482) (19,831)
Total equity 79,621 76,681 71,491 62,940 59,210
Braemar Plc Annual Report and Accounts 2024
164
Contact information
Registered office
Braemar Plc
One Strand
Trafalgar Square
London
WC2N 5HR
Company number: 02286034
Telephone: +44 (0)20 3142 4100
Web address:
www.braemar.com
Principal offices
Shipbroking
One Strand
Trafalgar Square
London
WC2N 5HR
80 Robinson Road
#24-01/02
Singapore
068898
Level 3, 70 City Road
South Bank
Melbourne
Victoria 3006
Australia
Corporate Finance
Domstraße 17
20095 Hamburg
Germany
One Strand
Trafalgar Square
London
WC2N 5HR
www.braemar.com
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Braemar Plc Annual Report and Accounts 2024
Braemar Plc
One Strand
Trafalgar Square
London
WC2N 5HR
www.braemar.com