Investigation into transaction mars strong end to year for Braemar

Shipping and energy markets advisor Braemar updated the market on its results for the 12-month period ended 28 February on Monday, while also revealing an investigation into a historic transaction.

The London-listed company said it was expecting to report record revenue and profitability for the financial year, with revenue projected to be at least £150m - a significant increase from £101.3m in 2022.

Underlying operating profit was estimated to reach at least £20m, up from £10.1m in the prior, while Braemar anticipated having net cash of £6.9m at the end of the 2023 period.

Braemar said it was intending to recommend a final dividend of 8p per share to shareholders at the upcoming annual general meeting, making for a full-year distribution of 12p per share.

That would represent a notable 33% increase compared to the prior year's full dividend of 9p per share.

However, alongside the positive trading update, Braemar disclosed that it was currently conducting an investigation into a historic transaction dating back to 2013.

The transaction in question involved around $3m in payments made until 2017.

The board, in collaboration with the company's auditors, had been scrutinising the transaction and its representation in the company's balance sheet.

Braemar's board expressed discomfort with the historical representation of the transaction and the remaining liability recorded on the balance sheet.

The company noted that the potential release of the liability on conclusion of the investigation would not impact its underlying trading profit or cash position for the 2023 financial year.

To conduct a thorough investigation, Braemar said it had engaged the services of FRP - an independent specialist firm.

In addition, the firm had formed a dedicated investigation committee, led by its non-executive chairman, to oversee the matter.

As a result of the ongoing investigation, the publication of Braemar's final results for 2023 would be delayed beyond the original deadline of 30 June.

Under FCA rules, Braemar is required to publish its audited results by 30 June, but the company said it would request that trading in its shares be suspended from 0730 BST on 3 July.

“The company will provide further updates on expected timings for publication of its 2023 results in due course,” the board said in its statement.

“The company expects to request a restoration of the listing of its ordinary shares on publication of its 2023 results.”

At 0915 BST, shares in Braemar were down 20.07% at 223p.

Reporting by Josh White for Sharecast.com.