UK shipbroker Braemar is confident it can grow profit by 100% over the next three or so years.
The refocused London-listed organisation has completed the divestment of non-core engineering and logistics operations, and is bringing all its remaining businesses, including finance arm Braemar Naves, under a single Braemar name.
Chief executive James Gundy said: “We will double the business. We are looking at various options.”
Any potential acquisition deals are being kept close to his chest, but he said they will relate to bolting on broking, finance and securities services around the world.
Chief operating officer Tris Simmonds is confident of reaching the profit target by 2025.
He said that when its annual results come out shortly, “people will see we are making big steps towards delivering that”.
In May, Braemar said its underlying operating profit is expected to be at least £12m ($15m) in the 12 months to 28 February 2023.
Guidance for the previous year ending in February 2022 remained at £9.8m or above, slightly higher than consensus.
“It seems like a really big number to say when you’re talking about doubling the size of the business,” Simmonds said.
“But in practice ... I think because shipbroking is such a profitable, solid business anyway, it’s not so unachievable now that you don’t have the noise from the other business.”
“It’s not an easy task but it’s not impossible.”
Gundy said Braemar now has a solid platform for growth.
Referring to its disposal of more non-core divisions recently, he added: “The other businesses — I don’t want to sit here and say bad things, but it was time to move on.
“We understand the [broking] space exceptionally well, we’ve been doing it for so many years.”
Simmonds said there has been a huge amount of collaboration between the different remaining units.
“I think people recognise the challenging landscape in front of them, so they’re not just sitting on their hands and doing the same thing they’ve been doing for the last 10 years,” he said.
“You can see that with some of the deals that Naves has done with our sale-and-purchase department, some huge transactions, [and] the massive growth in securities, particularly on dry cargo.”
Simmonds said the strong dry chartering department has massively assisted in growing the securities business.
“The chartering customers need and want to have access to those forward pricing curves,” he said. “It’s become an integral part of what they do.”
In 2020, Braemar launched a dry freight derivatives screen, in collaboration with technology company Zuma Labs.
Simmonds said this has become a successful platform rolled out to other brokers.
“You’re never 100% sure how things are going to look when you start on these projects,” he added. “This is stage one of an end-to-end solution.”
Braemar has also set up a carbon-offsetting platform.
“There are a lot more steps we will take in the future,” Simmonds said.
