UK shipbroker Braemar is expecting a big spike in earnings so far this year as trading activity increases.
In an update for the six months ended 31 August, the London-listed group said it continues to benefit from the “increased scale and breadth” of its broking operations.
These have achieved “significantly higher trading activity and transaction volumes during the period,” the James Gundy-led broker said.
Trading has been very strong with all sectors of the core shipbroking business generating higher revenue than in the previous six months, Braemar added.
Underlying operating profit will be at least £10.5m ($11.3m), an increase of 88% from the £5.6m logged in the same period of 2021.
Revenue is expected to be not less than £69m, compared to £47m in the same period of 2021, an increase of 47%.
Of this extra revenue, 36% has been derived from the group’s business activities and 11% from exchange rate movements between the US dollar and sterling.
In US dollar terms, revenue for the period is expected to be not less than $88m, up from $65m a year ago.
This gives an idea of the scale of the revenue increase the broker can expect from the slump in the pound to record lows against the dollar this week, following the disastrous tax-cutting UK mini-budget.
“The board looks forward to the second half of the year with a high degree of confidence in the ongoing execution of its growth strategy,” Braemar said.
Well ahead of 2021
Full interim results are due in mid-November.
The group announced its annual profit at the end of August.
Net earnings in the 12 months to 28 February were £13.9m, up from £4.5m a year earlier. Revenue grew to £101.3m from £83.7m.
At that point, Braemar was forecasting an underlying profit of at least £20m for the year to 28 February, 2023.
The strength of the US dollar was expected to contribute about £5m to this.
There was a 15% increase in the forward order book to $50m during the year ended in February.