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Braemar PLC on Tuesday proposed a capital reduction in order to increase future dividend payments to shareholders.
The London-based shipbroker & advisor in shipping investment said that it has continued to trade ‘well’ since the release of its interim results in November.
In November, the company had reported revenue of £69.4 million in the six months ended August 31, up 46% from £47.4 million a year before. Pretax profit surged to £10.1 million from £4.8 million.
Braemar had declared an interim dividend of 4.0p per share, doubled from 2.0p a year prior.
On Tuesday, the company said that its newly acquired Spanish and US businesses have progressed well. It added that both businesses are set to make an immediate and strong contribution to the company’s trading in the next financial year.
In December, Braemar brought Florida-based Southport Maritime Inc for $7.3 million. ‘Southport is one of the highest volume US-based shipbroking tanker companies. They are recognised as a leader for crude and refined products in the North American export market, as well as in the Latin American and Caribbean markets,’ Braemar said.
It also recruited a new tanker broking team, based in Madrid. The team of 10 brokers previously worked for Medco Shipbrokers SL and specialise in crude, dirty products, clean products, and period chartering.
Looking ahead, Braemar said it remains confident. It said will provide a more detailed update on expectations for the year to February 2024 in a pre-close update to be announced in mid-March.
Braemar also said it plans to convene a general meeting of shareholders in order to propose a capital reduction process. This reduction will require the passing of special resolutions at a GM and court approval.
At the time of this announcement, the company said it has £53.7 million in its share premium account and £23.4 million in its merger reserve account. It noted that both these accounts are non-distributable reserves and it is unable to these to pay dividends.
Braemar said it intends to reduce this by around £75 million, in order to create distributable reserves.
Braemar said that the capital reduction is designed to increase its distributable reserves, increase its capacity to pay future dividends and provide sufficient distributable reserves to cover all historic dividends paid.
Shares in Braemar were up 1.0% to 319.50 pence each in London on Tuesday afternoon.
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