Braemar — Interims in line, growth strategy developing

Braemar (LSE: BMS)

Last close As at 21/12/2024

GBP2.47

1.00 (0.41%)

Market capitalisation

GBP82m

More on this equity

Research: Industrials

Braemar — Interims in line, growth strategy developing

Braemar’s H124 results were in line with expectations with revenues up by 8%, but operating profits were down, having been hit by one-off costs. The underlying operations continue to expand and diversify, and the company remains well-positioned to drive its future growth strategy. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying revenue and operating profit estimates for FY24 and FY25 and retain our 520p per share valuation, offering c 85% upside.

Andy Murphy

Written by

Andy Murphy

Director, Financials & Industrials

Black cargo ship

Industrials

Braemar

Interims in line, growth strategy developing

H124 results

Industrial support services

7 December 2023

Price

285p

Market cap

£94m

US$1.26/£

Net cash (£m) at 31 August 2023

3.1

Shares in issue, including ESOP shares

32.9m

Free float

85%

Code

BMS

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

21.5

21.5

(9.0)

Rel (local)

19.2

20.1

(8.6)

52-week high/low

321p

224p

Business description

Braemar is the second largest shipbroker in the world, providing broking services to the dry cargo, deep sea tanker, specialised tanker and sale and purchase markets. It also addresses the fast-growing areas of offshore and renewables, securities and financial markets.

Next events

FY24 trading update

February 2024

FY24 preliminary results

April 2024

Analyst

Andy Murphy

+44 (0)20 3077 5700

Braemar is a research client of Edison Investment Research Limited

Braemar’s H124 results were in line with expectations with revenues up by 8%, but operating profits were down, having been hit by one-off costs. The underlying operations continue to expand and diversify, and the company remains well-positioned to drive its future growth strategy. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying revenue and operating profit estimates for FY24 and FY25 and retain our 520p per share valuation, offering c 85% upside.

Year
end

Revenue
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

02/22

101.3

8.9

23.1

9.0

12.4

3.2

02/23

152.9

18.0

45.5

12.0

6.3

4.2

02/24e

150.2

15.0

45.4

13.5

6.3

4.7

02/25e

150.2

15.8

46.6

14.0

6.1

4.9

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

In line interims highlight the benefit of diversification

In H124 Braemar reported revenue of £74.9m (up by 8%), with weaker rates in certain sectors more than offset by the inclusion of Southport Maritime and two new broking desks. Underlying operating profit was down but in line with expectations at £6.7m, due to a £2.8m swing in FX and to acquisition-related expenditure of £0.9m. Adding back these two factors implies that underlying operating profit was down less than 5%, highlighting earnings resilience due to diversification. Underlying, continuing and diluted EPS fell by 35.1% to 15.8p, but the interim dividend was held at 4p, and net cash rose more than 70% to £3.1m (from £1.8m in the comparable period).

Strategy on track to achieve doubling of profit

Braemar retains its medium-term target of achieving a sustainable doubling of the FY21 underlying operating profit of £8.9m by FY25. Management confirmed in its H124 release that Braemar will achieve underlying operating profit, before the Madrid tanker desk cost of c £1.3m, of £18m. FY25 is expected to be similar to FY24. We remain confident that this is achievable because the company is likely to continue to use the undergeared balance sheet to bring in teams of brokers in activities and/or regions where it is under-represented or absent. The recent acquisitions of Southport Maritime and the Madrid tanker desk are good examples.

Valuation: Unchanged forecasts and 520p valuation

The H124 outlook statement suggests a robust trading environment in FY24 and into FY25. Management anticipates that underlying operating profit in FY24 will be ‘not less than £18m’, excluding c £1.3m of costs relating to the acquisition of the Madrid office, and that it would double the FY21 profits by FY25. We have maintained our revenue and operating profit estimates, but EPS and net cash forecasts have risen due to adjusted treatment of the employee stock ownership plan (ESOP). However, we retain our dividend discount model-based valuation of 520p per share as our dividend forecasts are unchanged.

Diversification offers growth and reduces risks

Now that the historical transaction investigation has been completed and non-core businesses disposed of, Braemar is well placed to diversify within its core shipbroking activities. The strength of its increasingly diversified revenues is partially hidden in H124 by the impact of an FX reversal and the accounting treatment of the acquisition costs associated with some of the acquired businesses. That said, the company is well placed to continue to expand its activities and its geographical spread.

Braemar’s group revenue increased by c 8% in H124, which was driven by a number of differing factors (both positive and negative) in the period. We discuss each in turn below.

The largest division, Chartering, grew revenue by 17% to £52.6m in H124, driven by Deep Sea Tankers, which saw revenue increase by 68% to £28.5m. It accounts for more than half of divisional revenue and was driven by ‘relatively robust’ rates and a £10m contribution from the new businesses in the US and Spain. Specialised Tankers grew revenue by 15% to £9.3m as it expanded internationally but was partially held back by softer rates. Offshore Energy Services grew revenue by 70% to £3.8m as oil and gas activity picked up and offshore wind continued to grow. Dry Cargo revenue fell by 37% to £11.0m as rates declined, but volumes remained similar to prior levels. Despite the increase in revenue, underlying operating profit declined c 8% due to the inclusion of costs relating to the new businesses.

Exhibit 1: H1 results summary

£m

H122

H123

% chg

H124

% chg

Chartering

26.8

44.9

67.7

52.6

17.1

Investment advisory

15.1

16.3

8.4

12.4

(23.8)

Risk advisory

5.6

8.2

47.5

9.9

20.6

Revenue

47.4

69.4

46.5

74.9

7.9

Chartering

2.5

6.9

176.9

6.4

(7.9)

Investment advisory

4.2

3.7

(11.5)

1.7

(55.3)

Risk advisory

1.0

1.5

52.7

1.4

(5.4)

Operating profit

7.7

12.1

58.1

9.4

(22.1)

Central costs

(2.1)

(1.2)

(41.2)

(2.7)

124.8

Underlying operating profit

5.6

10.9

94.6

6.7

(38.4)

Chartering

9.3%

15.4%

-

12.1%

-

Investment advisory

27.9%

22.8%

-

13.4%

-

Risk advisory

17.1%

17.7%

-

13.9%

-

Underlying operating margin

11.8%

15.7%

-

9.0%

-

PBT

4.8

10.1

109.0

9.5

(6.1)

EPS continuing, diluted (p)

11.2

24.4

117.8

15.8

(35.1)

DPS (p)

2.0

4.0

100.0

4.0

0.0

Net (debt)/cash

(12.4)

1.8

N/A

3.1

(54.8)

Source: Braemar, Edison Investment Research

The second largest division, Investment Advisory, has a ‘lumpier’ revenue stream and suffered a 24% decline in revenue to £12.4m. Sale and Purchase, the largest divisional revenue contributor, witnessed a 16% decline in revenue to £11.3m as a lack of prompt newbuilding slots hampered activity. Elsewhere, activity in second-hand tankers, gas carriers and dry bulk deals was robust. Corporate Finance revenue declined by 60% to £1.2m as deal activity was subdued. Profit more than halved to £1.7m as a result.

Risk Advisory revenue increased by 21% to £9.9m as it expanded its global product range, which now includes Natural Gas, EU carbon allowances, Liquified Natural Gas Freight Forwarding Arrangements and oil derivatives. However, an increase in headcount costs led to a modest decline in profit to £1.4m.

Revised EPS and net cash forecasts

We updated our estimates after the release of the FY23 results and, following the interims, we have made no material changes to our revenue and profit estimates. We have, however, updated our model to reflect changes to our ESOP share treatment, which has resulted in a declining number of shares in issue and an increase in cash. In FY24e, EPS increases by 7% and cash remains unchanged, while, in FY25e, EPS (diluted, normalised) is increased by 10.7% to 37.0p and net cash rises by £4.4m to £15.2m. Our valuation is based on a dividend discount model and we have made no changes to it, but, with an increased EPS estimate, there would appear to be risks to the upside for dividends.

Exhibit 2: Revised forecasts

£m

2023

2024

2025

Old

New

% chg

Old

New

% chg

Revenue

152.9

150.2

150.2

0.0%

150.2

150.2

0.0%

Year-on-year % change

50.9%

-1.8%

-1.8%

-

0.0%

0.0%

-

EBITDA - Edison basis

23.4

20.1

20.1

0.0%

20.4

20.4

0.2%

Year-on-year % change

73.1%

-14.1%

-14.2%

-

1.5%

1.7%

-

Underlying operating profit

20.1

16.7

16.7

0.3%

17.1

17.1

-0.1%

Year-on-year % change

99.6%

-16.6%

-16.6%

-

2.4%

2.0%

-

Normalised operating profit

20.1

16.7

16.7

0.3%

17.1

17.1

-0.1%

Year-on-year % change

99.6%

-16.9%

-16.6%

-

2.4%

2.0%

-

PBT (reported, pre-exceptionals)

9.5

11.2

9.9

-11.7%

14.2

14.5

2.1%

Year-on-year % change

10.6%

18.2%

4.7%

-

26.8%

46.6%

-

EPS - diluted, normalised (p)

37.8

34.0

36.4

7.0%

33.4

37.0

10.7%

Year-on-year % change

77.8%

-8.3%

-3.8%

-

-1.8%

1.6%

-

DPS (p)

12.0

13.5

13.5

0.0%

14.0

14.0

0.0%

Year-on-year % change

33.3%

12.5%

12.5%

-

3.7%

3.7%

-

Net cash (pre IFRS 16)

6.9

4.0

4.0

0.7%

10.8

15.2

40.4%

Year-on-year % change

-174.1%

-41.5%

-41.8%

-

170.0%

276.3%

-

Source: Edison Investment Research

Exhibit 3: Financial summary

2019

2020

2021

2022

2023

2024e

2025e

2026e

Year end 28 February

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

117.9

117.7

83.7

101.3

152.9

150.2

150.2

150.2

EBITDA

 

 

10.4

14.4

11.4

13.5

23.4

20.1

20.4

20.8

Normalised operating profit

 

 

9.1

11.0

7.7

10.1

20.1

16.7

17.1

17.4

Exceptionals

(12.5)

(3.8)

(1.5)

(0.3)

(2.5)

(2.6)

(1.3)

0.0

Impairment

0.0

0.0

0.0

0.0

(9.1)

0.0

0.0

0.0

Other

0.5

0.7

0.0

0.0

3.0

(2.5)

0.0

0.0

Reported operating profit

(2.9)

7.9

6.2

9.7

11.5

14.1

15.8

17.4

Net Interest

(0.2)

(1.4)

(1.1)

(1.2)

(2.0)

(1.8)

(1.3)

0.1

Joint ventures & associates (post tax)

0.0

(0.3)

0.0

(0.0)

(0.0)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

8.9

9.4

6.7

8.9

18.0

15.0

15.8

17.5

Profit Before Tax (reported)

 

 

(3.1)

6.3

5.1

8.5

9.5

9.9

14.5

17.5

Reported tax

(1.5)

0.0

(1.6)

(1.8)

(4.9)

(2.5)

(3.6)

(4.4)

Profit After Tax (norm)

7.3

9.4

5.1

7.0

13.2

12.5

12.2

13.1

Profit After Tax (reported)

(4.7)

6.3

3.6

6.7

4.6

7.4

10.9

13.1

Discontinued operations

(22.7)

(2.3)

1.0

7.2

0.0

0.0

0.0

0.0

Net income (normalised)

7.3

9.4

5.1

7.0

13.2

12.5

12.2

13.1

Net income (reported)

(27.4)

4.0

4.5

13.9

4.6

7.4

10.9

13.1

Basic average number of shares outstanding (m)

31

31

31

31

29

28

26

25

EPS - basic normalised (p)

 

 

23.78

30.19

16.23

23.06

45.48

45.36

46.57

52.97

EPS - diluted normalised (p)

 

 

21.79

27.28

13.43

18.79

37.85

36.39

36.97

41.58

EPS - basic reported (p)

 

 

(88.63)

12.88

14.45

45.56

15.85

26.89

41.51

52.97

Dividend (p)

5.00

5.00

5.00

9.00

12.00

13.50

14.00

15.00

Revenue growth (%)

14.4

(0.2)

(28.9)

21.0

50.9

(1.8)

0.0

0.0

EBITDA Margin (%)

8.8

12.3

13.6

13.4

15.3

13.4

13.6

13.8

Normalised Operating Margin (%)

7.7

9.4

9.2

9.9

13.1

11.1

11.4

11.6

BALANCE SHEET

Fixed Assets

 

 

91.7

114.7

106.6

99.8

97.7

94.2

90.7

87.2

Intangible Assets

86.0

86.2

86.1

80.9

75.4

74.2

73.1

72.0

Tangible Assets

2.0

11.9

9.8

7.1

5.3

3.0

0.6

(1.8)

Investments & other

3.7

16.5

10.7

11.9

17.0

17.0

17.0

17.0

Current Assets

 

 

71.9

68.3

50.3

49.8

80.3

83.4

94.7

107.7

Stocks

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Debtors

37.1

39.5

33.4

35.8

43.3

49.4

49.6

49.6

Cash & cash equivalents

24.1

28.7

16.4

14.0

36.0

33.1

44.2

57.2

Other

10.6

0.0

0.4

0.0

1.0

1.0

1.0

1.0

Current Liabilities

 

 

92.0

78.9

54.0

43.4

65.8

63.8

67.0

69.9

Creditors

44.9

47.6

47.8

39.9

58.4

56.7

56.7

56.7

Tax and social security

1.4

1.3

1.3

1.6

4.1

1.8

2.9

3.7

Short term borrowings

35.8

25.1

0.0

0.0

0.0

0.0

0.0

0.0

Other

9.8

4.8

4.9

1.9

3.3

5.4

7.4

9.5

Long Term Liabilities

 

 

13.2

44.9

39.9

34.8

35.4

35.4

35.4

35.4

Long term borrowings

4.6

2.6

2.7

2.8

2.9

2.9

2.9

2.9

Other long term liabilities

8.6

42.2

37.3

32.0

32.6

32.6

32.6

32.6

Net Assets

 

 

58.4

59.2

62.9

71.5

76.7

78.4

83.0

89.6

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

58.4

59.2

62.9

71.5

76.7

78.4

83.0

89.6

CASH FLOW

Op Cash Flow before WC and tax

(1.8)

9.7

8.8

12.0

12.8

13.3

17.9

20.9

Working capital

4.6

(0.4)

4.1

5.2

4.1

(5.7)

1.9

2.1

Exceptional & other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Tax

(1.1)

1.2

(0.8)

(2.2)

(4.4)

(4.9)

(2.5)

(3.6)

Other

6.1

1.4

1.8

6.2

11.4

2.9

2.4

1.1

Net operating cash flow

 

 

7.8

11.8

13.9

21.3

23.9

5.6

19.8

20.4

Capex

(2.4)

(1.7)

(1.1)

(1.2)

(0.8)

(1.6)

(1.6)

(1.6)

Acquisitions/disposals

(1.7)

(6.3)

3.7

(8.1)

5.4

1.4

1.3

1.3

Net interest

(0.9)

(1.5)

(1.2)

(0.8)

(1.8)

(1.8)

(1.3)

0.1

Equity financing

23.0

3.9

(28.9)

(2.5)

1.4

1.4

1.4

1.4

Dividends

(4.6)

(4.6)

0.6

(2.1)

(3.2)

(3.9)

(4.4)

(4.6)

Other

(2.4)

0.0

(0.9)

(7.0)

(6.8)

(4.0)

(4.0)

(4.0)

Net Cash Flow

18.7

1.6

(13.9)

(0.5)

18.1

(2.9)

11.1

13.0

Opening net debt/(cash)

 

 

2.4

11.7

20.0

8.8

9.3

(6.9)

(4.0)

(15.2)

FX

(1.1)

(0.8)

(0.7)

0.3

2.6

0.0

0.0

0.0

Other non-cash movements

(26.9)

(9.0)

25.8

(0.3)

(4.5)

0.0

0.0

0.0

Closing net debt/(cash)

 

 

11.7

20.0

8.8

9.3

(6.9)

(4.0)

(15.2)

(28.1)

Source: Company data, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Braemar and prepared and issued by Edison, in consideration of a fee payable by Braemar. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

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

New Zealand

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

United Kingdom

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

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

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

United States

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

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Braemar and prepared and issued by Edison, in consideration of a fee payable by Braemar. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

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

New Zealand

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

United Kingdom

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

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

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

United States

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

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on Braemar

View All

Latest from the Industrials sector

View All Industrials content

Industrials

Carr’s Group — At an inflexion point

Solid State_resized

Industrials

Solid State — Interim results

Research: Consumer

Loungers — Happy eaters

Loungers continues to show that UK hospitality in the guise of an innovative, all-day value offer can deliver significant and sustained profit growth despite sector headwinds. H124 adjusted EBITDA (IAS 17) was 28% higher due to a like-for-like sales increase (+7.7%) and scale benefits from accelerated expansion (over 15% in the last year). Such momentum may only be reinforced by a burgeoning pipeline in a property market that management expects to remain favourable for the foreseeable future and thus conducive to a potential long-term trebling of the estate, which could be funded internally on the current model. A consensus FY24e EV/EBITDA (based on IAS 17 accounting standard) of 6.5x compares with a c 9x historical exit multiple for Restaurant Group, Loungers’ closest listed peer.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free