Braemar Shipping Services has the plans and finance in place for growth as staff prepare to return to the office.
As boxships and bulkers prosper, the UK shipbroker's chief executive, James Gundy, told TradeWinds he is positive about shipping's prospects.
"I am feeling quite pumped at the moment, to say the least," he said.
"We've invested a lot, the team has been resilient in working from home and we've come out the other side."
The London-listed company's forward orderbook has risen to $50.5m and net bank debt was reduced by 56% to £8.9m ($12.6m) in the year to 28 February.
It is "having conversations" about expansion in various sectors and has reiterated its ambition to grow in the US.
"There's a lot things we're evaluating, we've got some good ideas on the go, so we're hoping now to really push forward on the strategy of the business, which is growth," Gundy added.
The positive outlook and an annual profit of £5.1m has allowed Braemar to resume dividend payments, which were halted in April last year during the pandemic.
Gundy explained that there were still "some jobs to be done" earlier this year before payouts could be reinstated.
"I had a very strong game plan in my head, but I couldn't really start going forward with the strategy for the business until I sorted out the present problems. Reducing the debt was a key factor for me," he told TradeWinds.
"I'm not a lover of debt in any shape or form.
"I knew the business was starting to perform well and was pleased with the diversification story we'd built into the last five or six years of shipbroking. I was feeling very confident.
"These things allowed me then to say: 'I want to go back to dividends'. It's proving the fact that the business has to be run by someone who understands the business."
Right opportunities
Chief operating officer and finance director Nick Stone said the company is confident it will achieve a net debt to Ebitda ratio of 1.5 times this year.
"All other things being equal, we'd expect to get to the end of this year without net bank debt," Stone added.
"With the HSBC facility in place, it does mean we've got the wherewithal to invest when the right opportunities arise."
If the UK goes ahead and drops all Covid-19 restrictions from 21 June, Gundy will push staff to return to the office then.
Trial period
"I want to evaluate it for three or four months," he said. "I'm not sitting here saying the world hasn't changed, and maybe there is a situation where working from home is a bit more flexible.
"Maybe they start feeling, 'You know what, I'm missing my colleagues, I'm missing the office banter'. But it's down to guidelines from the government."
Stone believes it is vital to get all the brokers back in the office and "feeding off each other".
More flexible operations can be planned later, but "the broking floor is all-important to what we do", he said.
Gundy has identified a desire to get back in: "You miss the interaction. I don't think I've ever spoken so much about mental health in the last year — about protecting colleagues who are working on their own, making sure they're okay. It's healthy to get everyone back."
The boss said his teams have coped well with frenzied boxship markets, working "crazy hours".
"When a sector rallies, you have to grab it while you can," Gundy added.
The sale-and-purchase desk had a "phenomenal" second half in 2020, and he sees the newbuilding market going only one way.
Newbuilding strength
"You could order a VLCC for $85m in November — we did some deals — with delivery in March 2022. Now you can't get a ship for second-half 2023 and it's $100m."
Every sector is in demand, Gundy explained.
"I don't see the yards opening up capacity.
"I've been in [South] Korea many times and they're learning from their mistake in 2008, when they kept opening more capacity with prices accelerating, and then the market crashed and everyone was trying to default on the deals."
On 4 June, Braemar said Gundy bought 20,000 of the company's shares at £2.54 each for a total of £50,800 ($71,700), while chairman Nigel Payne bought 6,400 shares at £2.50 each.
Gundy now has a stake of 1.93%, and Payne 0.02%.
