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To understand the potential of Braemar (LSE:BMS) we need to look at the different, but interrelated and synergistic, business areas from which it makes profits for shareholders.
I’ll start this by relating the company history today. Tomorrow I’ll describe its three divisions.
A story of destiny
This is going to sound like a Jeffery Archer story (a bit): In 1982 there were two births, Braemar Shipbrokers and ACM Shipbrokers.
For two decades they went their separate ways, grew strong, encountered and overcame many challenges.
They eyed each other from afar. But it was many years before destiny was to bring them together.
In their formative years they entered similar lines of work. ACM was a capable teenager helping ship owners find cargo, and helping oil and gas companies find someone to move their product around the world.
ACM became so expert that in its twenties it was the market leader in oil transportation arrangements, with offices in London, Singapore, India, Australia, China, USA and UAE.
By the age of 32 it had 140 brokers and support staff doing the following: spot freight brokerage, time charter and project brokerage, sale and purchase, new buildings (of ships, offshore oil structures, etc.), demolition (of ships, etc.) and derivatives brokerage.
It had even floated on AIM (2006), and by 2014 had a market capitalisation of £48.2 million. For the year to March 2013, it reported turnover of £24.1 million, profit before tax and amortisation and impairment for intangibles of £3.1 million.
Not so far away
Braemar specialised in assisting the sale and purchase of ships. This is a bit more complicated than what an estate agent does for house sales. Firstly, agents might be hired by both the ship buyer and the seller.
The agents then deal with the negotiations and contracts as well as inspections of both documents (e.g. maintenance evidence, mortgage outstanding, logbook) and the physical ship afloat (e.g. safety, equipment, engine issues).
When Braemar was 19 years-old it was attracted to a much older lady. Seascope Shipping was all of 29 years-old. She had made good in the world, even reaching membership of the club of AIM (joining in 1997).
She was wooed and won, bringing the two independent private shipbrokers together. A successful marriage begun.
Seascope came with a dowry. Tucked away was Wavespec, a company specialising in marine engineering consultancy which carries out tasks such as vessel condition surveys, vessel pre-purchase inspections, safety audits, project management of vessel construction and vessel conversion, development of repair specifications, contract negotiations, vessel design development and review.
Also, in 2001, Braemar Seascope acquired the fifteen year-old Braemar Tankers; a private shipbroker specialising in tanker chartering.
More mergers and acquisitions were to follow:
•Cory Brothers in 2003, now the centrepiece of the Logistics Division, does a lot of moving stuff around on quaysides.
•Seawise Australia Shipbroking in 2005. A dry cargo shipbroker.
•DV Howells in 2006. Started life in Milford Haven in 1940s as an “oil spill response service”. Now part of Braemar’s team of businesses that offer a worldwide “integrated risk management and incident service”, for example, sending people to help clean up after an oil tanker runs aground, or recovery of shoreline debris if a cargo ship spills its load
•Falconer Bryan in 2007 (now part of Technical Division as Braemar Offshore). Consultants for marine engineering, naval architecture, structural engineering and loss adjusting (for insurers when there is a claim).
•Steege Kingston in 2008, now Braemar Adjusting part of the Technical division. Services to insurance and reinsurance companies, including, loss adjusting, risk assessment, legal/expert witness, construction dispute resolution.
•Shipbroking business of Harris and Dixon in 2008.
•Endeavour Shipbrokers………………………….To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
