UK-listed Braemar Shipping Services is rejigging its staff bonus policy as business stays brisk in the final weeks of its financial year.
The London-headquartered shipbroking group said the strong trading seen in the first half of the annual period ending on 28 February has continued throughout the second half to date.
Underlying operating profit for the year is now forecast at £9.8m ($13.3m), against the £7.7m reported a year ago.
Revenue will be at least £101m, up from £84m in the previous 12 months, Braemar said.
Employee reward arrangements are being changed, adding £2.8m in cash to the bonus pot for the current year.
This is 50% more cash as Braemar awards 50% less deferred stock “in order to better align shareholder and employee interests and support growth”.
There will also be “clawback arrangements” on cash payments to encourage employees to remain with the group.
The proposed changes should boost profit in future years as the charge for deferred equity is reduced, the company said.
Investments paying off
Braemar explained its strong performance thus far reflects “favourable market conditions and, more importantly, the investments we have made in increasing the breadth, focus and depth of the group’s shipbroking activities”.
A volatile dry cargo market has helped the company increase both revenue and market share on the physical and securities desks.
The sale-and-purchase desk has concluded a significantly higher number of transactions, largely due to bulker strength, but also due to the synergies gained from closer collaboration with the financial division in the container ship sector, Braemar said.
Tanker market rates have remained low, impacted by pandemic related weakness in oil demand, the company added.
But tanker transaction volumes have increased by more than 25% compared with the previous year, aided by strategic hires, including product tanker broker recruitment in Geneva.
The disposal of the non-core logistics division Cory Brothers is making good progress and should be concluded in the next few weeks, the company said.
Braemar had planned to operate this unit as a joint venture with Vertom, but has now revealed this will be a straight sale.
