TIDMBMS
RNS Number : 5896B
Braemar Shipping Services PLC
07 June 2019
BRAEMAR SHIPPING SERVICES PLC
("Braemar", the "Company" or the "Group")
7 June 2019
Annual Report and Notice of General Meeting
Braemar Shipping Services plc (LSE: BMS), a leading
international provider of broking, financial, consultancy,
technical and logistics services to the shipping, marine, energy,
offshore and insurance industries, today announces that it has
published its Annual Report and Accounts for the year ended 28
February 2019 ("Annual Report"), together with the Notice of Annual
General Meeting ("AGM").
The AGM will be held at the offices of Buchanan Communications,
107 Cheapside, London EC2V 6DN at 2 pm on Wednesday 3 July
2019.
The Annual Report and AGM Notice will be available on the
Company's website (www.braemar.com) and, together with the Form of
Proxy for the AGM, will be submitted to the National Storage
Mechanism and will shortly be available for inspection at:
www.morningstar.co.uk/uk/nsm. Copies of these documents have also
been posted today to those of the Company's shareholders that have
elected to continue to receive hard copies.
Appendix
This appendix sets out the disclosures that the Company is
required to make to comply with Disclosure and Transparency Rule
(DTR) 6.3.5R, namely: the principal risks and uncertainties facing
the Company; the directors' responsibility statement made in
respect of certain sections of the Annual Report; and a statement
regarding related party transactions. This information has been
extracted from the Annual Report in unedited text and is not a
substitute for reading the full Annual Report.
Page references and note references below refer to page numbers
and numbers of notes to the accounts in the 2019 Annual Report.
Legal Entity Identifier: 213800EV6IKTTHJ83C19
Principal risks and uncertainties
COMPREHENSIVE APPROACH TO RISK MANAGEMENT
Effective risk management forms an integral part of how we
operate. It is essential for delivering our strategic objectives as
well as protecting our relationships and reputation.
The Directors have carried out a thorough assessment of the
risks that the Group faces. The management and reporting of these
risks enable the Audit Committee to review their nature and extent.
The risk monitoring process has been in place throughout the year
and up to the date of approval of the Annual Report.
Risk management process
During the year the Group implemented a digital risk management
framework solution. The principles of this system were
fundamentally the same as the Group's existing risk management
framework, but with the added advantage of acting as a central
storage facility that allows for real- time updates and continuous
monitoring of risks.
Our approach to risk management incorporates both bottom-up and
topdown review of the identification, evaluation and management of
risks. Within the risk management framework, initial responsibility
for identifying, monitoring and updating risks is delegated to
individuals in the divisional management teams. At Group level, key
specialist personnel covering areas such as IT, HR, legal and
finance consider risks to our strategic objectives which are not
addressed in the divisions. The results of this risk framework form
the basis of the risks identified on pages 35-37.
The Group takes various measures to mitigate risk; the key steps
in the risk management process undertaken during the year
include:
-- Maintaining appropriate insurance cover.
-- The Group budget which is prepared annually and approved by the Board.
-- Regular financial reforecasts prepared and approved by the Board.
-- Monitoring the performance of the Group and the individual
businesses against budget and reforecasts throughout the year
including investigation of significant variances.
-- An internal system of checks and authorisations and
independent audits which are conducted in relation to the ISO
9001:2000 certification held in the Logistics and Technical
divisions.
-- Operation of the Group's whistleblowing procedure.
-- Treasury management activity which is regularly reported to
the Board by the Finance Director. Note that the Group does not
enter into speculative treasury transactions.
-- Using common Group systems covering accounting, HR and
operations supported by a global IT team.
-- Monitoring contractual risk by Group General Counsel.
-- Succession planning and strategic recruitment supported by the Group HR team.
The Group's risk management framework uses a matrix approach to
determine both the likelihood and the impact of identified risks.
The matrix produces a score which is used to evaluate collectively
the extent of all risks within a similar categorisation or certain
profile, and to illustrate the effectiveness of our mitigation of a
single risk by capturing the gross and current (net of mitigation
controls) score of each individual risk.
All identified risks are aggregated and reviewed to assess their
impact on the Group's strategic objectives and the resources
required to manage them effectively. Principal risks are aggregated
together with associated issues or areas of uncertainty. The extent
of controls and mitigation as well as the potential for a material
effect on the market value of the Group are then assessed. By
definition, unmitigated risks can be significant, but our control
processes and management actions reduce the risk level.
The divisional management teams as well as Group management
(which includes the Chief Executive, Finance Director and General
Counsel) monitor risks regularly and considers the appetite and
tolerance for them in the light of their potential impact on the
Group.
Principal risks
Description of Summary of impact Mitigating control Assessed risk
risk and management level and change
actions
---------------------------------- --------------------------- -------------------------- ------------------
Macroeconomic A downturn in The Group's strategy Increased
changes the world economy of diversification
All of our businesses could result on a sector and
are subject to in reduced transaction geographic basis.
the volumes and lower Ongoing management
impact of macroeconomic revenue. of costs based
changes, Changes in shipping on current and
such as changes rates and/or reasonably foreseeable
in the crude changes in the market conditions.
oil price, demand or pricing Continued monitoring
restrictions of commodities to ensure
in global trade could affect that appropriately
or changes supply activity. structured teams
in supply and are located across
demand. all divisions
Divisions: S and geographies.
F L E
---------------------------------- --------------------------- -------------------------- ------------------
Financial liquidity All divisions Continued working No change
The Group requires have seen changes capital management
a significant in business and and monitoring
amount of working working capital across the Group.
capital. Certain requirements. Senior management
revenue streams Debt collection intervention
can have a long is critical across to
lead the Group. assist in recovery
time to convert All borrowing of problematic
to cash. Such facilities are debtors.
delays with Maintenance of
could cause liquidity one UK financial Group treasury
problems for institution, management controls
the Group. whilst to monitor cash
Divisions: S significant amounts positions worldwide
F L E of funds are and coordination
held of
outside the UK cash repatriations
in other institutions. to the Group.
Ongoing repatriation Continuing the
of funds to the consolidation
UK to enable of banking
the Group to relationships
operate and the implementation
within its banking of
covenants. global pooling
capabilities.
---------------------------------- --------------------------- -------------------------- ------------------
Management Business value Continue development Decreased
Capability and earnings of career path
Insufficient could be reduced and succession
senior management if key executives planning for
bandwidth (quality are not available all senior
and quantity) to manage management positions.
could lead to business opportunities. Continuation
poor execution of career path
of the and
Group's strategic succession planning
objectives or to ensure suitable
lost management structures
business opportunities. are maintained
Divisions: S across the Group.
F L E Maintain competitive
remuneration
packages, including
use of deferred
equity awards.
---------------------------------- --------------------------- -------------------------- ------------------
Corporate skillsets If key staff Continue development No change
Failure to attract leave the Group, of career path
and retain skilled they and succession
people could are likely to planning for
result in loss take "their" all staff.
of key client business Maintain competitive
relationships with them, resulting remuneration
or failure to in a loss to packages, including
cultivate new the Group. use of deferred
client relationships. If new staff equity awards.
Divisions: S are not attracted
F L E to the
Group, then rate
of growth may
be limited.
---------------------------------- --------------------------- -------------------------- ------------------
Financial capacity Without sufficient Ensure that all Increased
Inadequate financial financial resources divisional growth
capacity to the Group cannot opportunities
execute the Group's execute all of and strategies
strategic the growth opportunities are regularly
objectives. that may communicated
Divisions: S be available. to
F L E senior management.
Complete strategic
resource analysis
of all identified
growth opportunities
to ensure that
resources are
allocated to
opportunities
with the best
return.
---------------------------------- --------------------------- -------------------------- ------------------
Technological Relationships Continue to develop Increased
changes could be devalued and promote the
The threat of and Braemar corporate
technological replaced by disruptive brand and values.
change technology Continue to recruit
could render platforms, resulting and retain talented
aspects of our in increased and experienced
current competition and staff.
services obsolete. consequent Developing our
Divisions: S price reductions. own technological
E expertise and
strategy.
Seeking appropriate
acquisition
opportunities.
Engaging with
external consultants
to
assess market
developments.
---------------------------------- --------------------------- -------------------------- ------------------
Currency fluctuations The Group is Monitor foreign No change
A large proportion exposed to fluctuations exchange movements.
of the Group's in the value Implement the
revenue is generated of US dollars. Group's hedging
in US strategy
dollars while over a rolling
the cost base twelve-month
is period.
in multiple currencies.
Divisions: S
E
---------------------------------- --------------------------- -------------------------- ------------------
Remuneration Business value Continue to maintain No change
Implementation and earnings appropriate and
of inappropriate could competitive remuneration
incentive and be reduced. packages.
reward structures
could incentivise
negative behaviours,
such as short-termism,
or create
internal conflict.
Divisions: S
---------------------------------- --------------------------- -------------------------- ------------------
Communication Internal and Continue to develop No change
Poor communication external relationships and prioritise
within the could be damaged. cross-divisional
Group could impede Contract management communication
the execution and business and
of development opportunities business development
the Group's strategic could opportunities.
objectives. be damaged.
Divisions: S
F L E
---------------------------------- --------------------------- -------------------------- ------------------
Legal and Reputational Monitor and report No change
regulatory impact damage to the on legal and
Legal or regulatory Braemar regulatory compliance
breaches could brand at Group across
result in fines or divisional the Group.
and sanctions level. Train all staff
or, in the to be aware of
worst case, loss legal
of ability to and regulatory
operate. obligations.
Examples could Maintain adequate
include noncompliance levels of
with the Bribery insurance cover.
Act or
Modern Slavery
Act on inadvertently
dealing with
sanctioned individuals
or entities.
Divisions: S
F L E
---------------------------------- --------------------------- -------------------------- ------------------
Cyber crime Loss of service Implement robust Increased
Cyber crime could and associated security measures
result in disruption loss to prevent cyber
to the Group's of revenue. crime.
IT systems. Reputational Maintain archiving
Divisions: S damage. solutions so
F L E Potential for data
loss of cash lost in the event
due to of a breach can
fraud or phishing. be
recovered quickly
and efficiently.
Key information
retained in multiple
systems and locations.
S = Shipbroking, F = Financial, L = Logistics, E =
Engineering
Responsibility statement of the directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the company and the undertakings included in the consolidation
taken as a whole; and
-- the strategic report and directors' report includes a fair
review of the development and performance of the business and the
position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the group's position and
performance, business model and strategy.
Related party transactions
During the period the Group entered into the following
transactions with joint ventures and investments:
2019 2018
--------- ----------------------------------- -----------------------------------
Group Recharges Dividends Balance Recharges Dividends Balance
to/(from) GBP'000 due from to/(from) GBP'000 due from
GBP'000 GBP'000 GBP'000 GBP'000
--------- ----------- ---------- ---------- ----------- ---------- ----------
London
Tanker
Broker
Panel 330 - - 325 - -
All recharges to related parties are carried out on an
arm's-length basis.
Key management compensation is disclosed in Note 4.
Following the acquisition of NAVES Corporate Finance GmbH in the
year, the Group has an additional related party, Risorto GmbH,
which is controlled by its management. The amount charged by
Risorto GmbH in the year to the Group was EUR0.6 million (2018:
EUR0.8 million) and the amount charged to Risorto GmbH in the year
was less than EUR0.1 million (2018: less than EUR0.1 million). The
balance owing to Risorto GmbH as at 28 February 2019 was EURnil
(2018: EUR0.7 million).
The Company has applied the disclosure exemption of FRS 101 in
respect of transactions with wholly owned subsidiaries. The Company
did not enter into any related party transactions aside from those
with wholly owned subsidiaries.
Key management compensation
The remuneration of key management is set out below. Further
information about the remuneration of individual Directors is
provided in the Directors' Remuneration Report on pages 52 to 56.
Key management represents the Group Board of Directors of the
Company.
2019 2018
GBP'000 GBP'000
------------------------------- -------- --------
Salaries, short-term employee
benefits and fees 672 862
Other pension costs 64 86
Share-based payments 33 -
One-off costs related to 759 -
board changes
------------------------------- -------- --------
1,528 948
Number of key employees 5 7
------------------------------- -------- --------
Retirement benefits are accruing to one (2018: one) member of
key management in respect of a defined contribution pension
scheme.
For further information contact:
Braemar Shipping Services plc
James Kidwell, Chief Executive Tel +44 (0) 20 3142 4100
Nick Stone, Finance Director
Peter Mason, Company Secretary
Shore Capital
Robert Finlay / Antonio Bossi / Henry Willcocks Tel +44 (0) 20
7601 6100
Buchanan
Charles Ryland / Stephanie Watson / Matilda Abraham Tel +44 (0) 20 7466 5000
About Braemar Shipping Services plc
Braemar Shipping Services plc is a leading international
provider of knowledge and skill-based services to the shipping,
marine, energy, offshore and insurance industries. Founded in 1972,
Braemar employs approximately 750 people in more than 60 locations
(although this will fall by approximately 250 people and 30
locations following the disposal of the Technical business units)
worldwide across its Shipbroking, Financial, Logistics and
Engineering divisions.
Braemar joined the Official List of the London Stock Exchange in
November 1997 and trades under the symbol BMS.
For more information, visit www.braemar.com
This information is provided by RNS, the news service of the
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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