Good morning, and welcome to the Braemar PLC half year results investor presentation for the six months ended the 31st of August, 2022. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, can be submitted any time via the Q&A tab situated in the right-hand corner of your screen. Just click Q&A, scroll to the bottom, type your question, and press Send. The company may not be in a position to answer every question received during the meeting itself, but the company review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Nick Stone, CFO. Good morning. Morning. Thank you very much, Paul. First thing, just to say to everybody, thank you for joining us. James Gundy sends his apologies. He's currently in Australia. We've had a great couple of years down there in the dry cargo market, and James is on a long overdue trip to go and visit the offices there and meet and greet some of the clients and employees that we've got. Tris and myself will take you through the presentation, and we'll, as Paul says, do our best to answer the questions at the end. Moving on, just our introduction for the year. Our results, as you'll have seen, are very strong and significantly ahead of our original expectations. We've had revenue and fixture volumes growing, and we've seen profits double. We'll talk a little bit about the reasons for that on the coming slides. The success is in many ways due to the focus on our core strengths in the business. As you know, the business has been simplified. We've carried out a number of diversifications over the last couple of years and now have a very clear strategy based around the shipbroking core of the business. In doing that, we've increased our scale in this area. We've increased our global reach and some elements of diversification within this core. In addition, we have rebranded during this period just to ensure that we have a very clear delineation between what was before and what is now. Trading results then. Revenue was up 46%. Underlying operating profit up by 96%. Much of the focus over the last couple of years has also been on strengthening the balance sheet, and it's very good to see that in bank terms, we have Net Cash at the end of the period of just under GBP 2 million. This compares to net bank debt of around GBP 20 million 18 months previously. We're continuing to increase our transaction volumes, and although we have a strong market in the sense of the shipping markets and also a strong tailwind in terms of foreign exchange, our, the great majority of our revenue is earned in U.S. dollars, and therefore in Sterling terms, we've got some benefit from that. Nevertheless, the growth in terms of revenue, in dollar terms, so stripping out the foreign exchange, is 36%. Ten out of that 46 is what has come from the foreign exchange impact. You'll see on the coming slides, very strong operating cash flow in the period, and we continue to operate a progressive dividend policy. In fact, the dividend has doubled from last half year from 2p to 4p. The financial summary then, just a bit more color on some of these numbers. Revenue for the period, GBP 69.4 million, up 46% from the 47 the year before. Underlying operating profit, GBP 10.9 million, up 95% from the 5.6 the period before. In previous years, we've had some significant differences between underlying operating profit and our reported statutory profit. You'll see that the statutory profit is only GBP 400,000 lower than the underlying operating profit. The difference being the charge to the income statement from certain acquisition-related items, including the acquisitions of NAVES, which is now our corporate finance business, and Braemar Atlantic, which is at the core of our securities business, and it's trading very strongly. Reported profit up by 114% in the period. I mentioned operating cash flow in the period, GBP 12.3 million, compared to the operating profit of GBP 10.9 million. Up by well over 200% from the period before where it was only GBP 3.8 million. Dividend we covered doubled, and if you look at the market expectations for dividend for the full year, you'll see that it's expected to be about 12p for the full year. Moving to the more traditional one-third, two-third split between interim and final. Last year, the full year comparison was 9p. Net bank debt now in fact cash, GBP 1.8 million. The previous balance sheet, it was at GBP 9.3 million of net debt. Forward order book is another one of the KPIs we look at very carefully. $55.5 million, which is up from 50 at the period end. The forward order book is revenue that we have secured in terms of contractual obligations, but not yet recognized because the revenue recognition point hasn't yet arrived. I mentioned just now that the forward order book is one of the key performance indicators we monitor. You can see the others on this next chart. Revenue and revenue per head is in dollar terms, so you can see the strong growth, even without the benefits of the foreign exchange tailwind. You can see that our underlying operating profit margin is growing at the same time. The forward order book, although it was about the same, the 12 months previously has grown since the last year end, and is moving in a positive direction, as you can see from the chart. Now, the next one is the total leverage ratio that we measure on an annual basis. Whilst there was Net Cash at the end of the period, we do have some seasonal debt when we pay bonuses, and the ratio was under one half of EBITDA. What we had said previously is that we'd start paying a dividend again, once the annual average was below 1.5 times. Very comfortably below that for the period. We'll then move on and Tris will talk a little bit about what's going on operationally in the various desks. Thanks, Nick. Looking at the pie chart for the first half of this year, I think it would be good for you to have a little bit of color on what the actual revenue growth has been in Sterling terms. You can see the diversity of the business there on the pie chart. I think something that obviously is working very well with Braemar is that we're still able to deliver positive revenue gains after such a good year last year and the first half of this year. Just to break down some numbers. Sale and purchase in Sterling terms, we've seen a 36% increase year-over-year for the first half of this year. Deep Sea Tankers is up over 90%, specialized tankers in excess of 55%, offshore energy services up 10%, dry cargo 61%, securities 47%. The only sector that's lagging behind here, and this is probably as a result of deal fruition, which we expect to happen in the second half of this year, is corporate finance is down considerably. Just to give you a little bit of detail of what's going on in those individual sectors. I think the sale and purchase remains very active still. We see a lot of activity in the second-hand market. There are still some big asset plays going on in ownership. I think obviously most recently, in the last few months with the impending sanctions coming on transport of Russian oil and products, you know, we're seeing a repositioning of ownership of various fleets ahead of that change. I think we still see the second-hand market being particularly busy because the newbuild availability yard shortages is switching that asset play into the second-hand market. We expect that to continue moving forward. Deep Sea Tankers rates have gone from over a year ago being in negative territory to, at the height of the start of the Russia-Ukraine crisis in the Baltic, rates being in excess of $300,000 a day. It did normalize somewhat to below $100,000 at some point, but I think again, with the impending squeeze that's happening on the sanctions that are gonna be imposed as of December the fifth, again, a real move of a lot of products and a limited supply of ships out there, which the net result of that is some of the rates pushing back into the $200,000 a day. I think also of note here, aside from the knock-on effects of the Russia-Ukraine crisis, U.S. Gulf to China rates on VLCCs are back up around $14.5 million a day. Another area of extreme activity and high rates is the U.S. down to the Caribbean. Specialized tankers, LNG and LPG, again, a lot more long ton-miles being achieved by our desks. Obviously, LNG in particular because of the ongoing shortage of gas. You're seeing rates that have moved, you know, being down at $20,000 a day back up to in excess of $300,000-$400,000 a day. I mean, again, a restricted supply of vessels means that in the short term, we're not expecting that to change. I think an interesting example of the diversity that we have in the business is our dry cargo department. If you look at last year, it was all about Capes and some of the larger vessel sizes. We saw extreme volatility in that space with rates peaking at $85,000 a day on Capes to falling below $10,000 a day. We still achieved +60% revenue growth in dry cargo. I think that's a good reflection of the diversity that we now have from our scale compared to other brokers. I mean, Nick briefly touched on it, but you know, we've been very active in Australia and Asia on the smaller vessel sizes, particularly Handymaxes, which I think you know, you've seen a switch year on year of last year dry cargo, the longer runs, et cetera, from Brazil to China, were keeping us very busy. Now obviously very busy in Australia and Asia. Securities, we have continued growth in revenue. Our JV with GFI is nearly 20 years old. The desk still goes from strength to strength, producing record revenue numbers month on month. Again, attributable to extremely high volatility in that space, longer tenor of transactions taking place. The dry FFA desk that we invested in four years ago continues to grow. Bench strength is larger on that with many new brokers coming in. We invested in technology which has continued to enable us to grab market share. Even with rates falling in that dry cargo sector, our actual transaction growth is increasing. Likewise, we've seen a real pickup in the activity for our physical coal business, which falls within the securities sector. Again, security of supply in Europe in particular, and the niche that we have in that space has meant that we've been very active on physical delivery, deliveries into ARA, which has been good. Moving forward, we generally expect the activity that we have in tankers, S&P, dry cargo, securities, all of our departments really, to continue in the foreseeable future. I think that's as a result of a number of factors in that the shipping market seems to be in a period of flux in that post-COVID, Russia, Ukraine, we are seeing a redraw of the great global trade routes that shipping is using. We're being forced to have more active spot markets and more thought to try and secure supply moving forward. I think that pre-COVID, you know, across a lot of the different sectors that we deal in, we had what I would call virtual pipelines existed where, you know, ships were on long-term charter. It was very hard to sort of break into that space and for there to be such necessity for spot transaction. I think, you know, given the changes that we have seen post-COVID and Russia, Ukraine, that generally we're seeing people having to find different ways of moving products around, which means that there's a jostling for position in many different sectors, and we expect to see that continue. I think, moving further ahead, as of 2024, we're gonna see shipping fall into the EU ETS. I think we'll see continued regulation come into our space. Shipping really has had a bit of a push back on which direction it wants to change to take in so far as new orders on, and choosing the propulsion systems that they want to use. I think if in the next year or two, we could perhaps see some normalizing as a result, hopefully, you know, Russia, Ukraine, perhaps coming to an end and/or COVID, post-COVID, that things normalize somewhat. I think shipping has an impending cliff edge, and that the regulatory changes from environmental pressure are gonna force change on the supply of what we transport products around them. Just briefly touching on securities. You know, we have invested heavily in dry cargo in the past number of years. I'm sure some of you have seen that most recently we've divested a little bit into natural gas. We had the opportunity to take a team of 10 brokers, which very much fits with our profile of seeing the synergies from products that we're transporting, and the overlap and ability for us to diversify somewhat into the underlying products that we're actually, you know, carrying on the ships that we're chartering for people. Nat gas is a very obvious product for us to get involved in. We saw the synergies between coal and dry FFA and our dry cargo department and, I mean, certainly in the setup of the nat gas desk, we're already seeing the synergies between that and our LNG chartering desk, which, you know, as you can see that we've increased revenue as a total of overall revenue from 3% in 2018-2019 to 12% in 2022-2023, which I think we'll be able to return single-digit growth over the next few years, for sure. Maybe not double digit, but, you know, it depends on what other products we can get involved in. Opportunities for growth. I think the most obvious areas that we have grown and continue to see opportunity for are in Europe. We opened an office in Geneva three years ago. I mean, the addition of that clean tanker business in Geneva has certainly contributed massively to the tanker revenues that we've just been talking about. Since opening the office, we've been able to put more people from dry cargo into that space. We're now gonna move some people from sale and purchase into that area. We're also looking at the opportunities that we may have to transfer some of our derivative business to Geneva. We also opened an office in Athens, which initially was an outpost for sale and purchase. We've since diversified into containers and dry cargo. I think these are all sort of showing that once we move a team into a new geographical area, generally we have a follow-through from other sectors that weren't obviously going to be there, seeing an opportunity based on the clients that are in that space at the moment. I think another good example of this is in the Middle East, which certainly initially post-COVID, there's a bit of a shift from the Middle East to Singapore. I think we're now seeing possibly as a result of the Russia-Ukraine crisis, that we've moved back to the Middle East. A lot of our competitors and our customers are certainly increasing the number of personnel that they have in Dubai and other areas in the Middle East. That's probably as a result of the repositioning of ownership that we were talking about earlier, as a result of Russia and Ukraine. Also, the general perception that, you know, any new refining capacity that's gonna come to the market, in the next three to five years, a considerable portion of that will come from the Middle East. So it's seen as a real area of growth, which obviously we look to capitalize on. A real another sort of opportunity for us moving forward is in North America. I briefly touched earlier on how busy the U.S. Gulf and, you know, whether that's U.S. Gulf to China and/or U.S. Gulf down into the Caribbean, a very busy space at the moment, on all vessel sizes. We have been able to successfully establish a team of specialized brokers in Houston. It's very much an area that we wanna focus on and continue to grow. We're actively speaking to people and, you know, we hope in the next year to formalize some partnerships and/or acquisitions that will enable us to grow that business in North America. I think in summary, moving forward, we still see huge opportunities in all of the sectors that we deal in. I think that we've reached the size where we have that scale, as we were talking about earlier in the dry cargo market, that we still. You know, if one sector was very good for us a year ago on the larger vessel sizes, because of that diversity now, you know, we're able to have substantial increases of revenue through from other sectors from the dry cargo. We do foresee rates in most of the sectors that we deal in remaining high over the next 12-24 months. We've briefly talked about the remapping of trade routes and certainly with the complicated sanctions structure that we're gonna have to navigate over the next few months, we see that as a positive for our business. Again, a knock-on effect is the growth in ton-miles, which haven't really sort of touched on that too much so far, but I mentioned environmental changes and the confusion over likely fuel for propulsion. I think the general perception is that in the short term, we will see slow steaming, and that's something which could be beneficial to us as brokers with vessels on time charter. New build capacity we touched on, still very, very low, with minimal shipyard capacity for new builds up until 2025. That's not changing. Again, ESG will be forcing change on shipping moving forward. Thanks, Tris. What does this mean for the outlook for Braemar? Clearly, the story that you've heard and the messages we're trying to give, the current year is looking very positive for us. We expect that trading will continue to exceed our original expectations for the year. We've invested in more internal resources, some in support infrastructure, as well as bringing in new brokers and new teams, 'cause we recognize that if Braemar is to grow over the coming years, we need to make sure that the team is fit for purpose for that growth. We've made no secret of our target to double the underlying operating profit of the business that was first put out there in October 2021, so just over a year ago. What that looks like is an underlying operating profit of GBP 18 million. Now, if you've seen the forecasts for the business for the current year and they are available on our website from the forecasts from Stifel and from Edison, you'll see that they actually are forecasting more like GBP 20 million for the current year. From our point of view, we do have a strong benefit of the foreign exchange impact on the current year's results. We've estimated that at around GBP 5 million of the profit. When looking at this from a like-for-like basis, we would measure ourselves assuming that's what we deliver at around GBP 15 million rather than GBP 20 million. GBP 15 million compared to the target of GBP 18 over a four-year period is obviously still very strong progress. We, as I say, we're looking to do this on a like-for-like basis and therefore won't quite have achieved our goal yet. Free of bank debt, for the moment. I mean, Tris has talked about our ambitions to grow. You might also have seen in our statement that we've renewed our banking facilities with HSBC. HSBC have been very supportive over the recent years, particularly through COVID. We're very pleased to have been able to renew our facilities, which does give us the ability to spend some cash on bringing new teams or small acquisitions in. It doesn't necessarily mean we'll be free of bank debt over the coming years, but we're clearly gonna manage it very carefully and make sure it never goes to the sort of leverage ratios that we had two or three years ago. We are, as we said, continuing to achieve fixture volume growth. Yes, the markets are strong, the foreign exchange is supportive, but we're also growing the volumes of business we do underlying that. Our new brands, and you may have seen that, Braemar Shipping Services Plc has now become Braemar Plc, which sort of reinforces the change of the strategy and the focus on the core. In terms of therefore, where the business is looking at, we continue to grow the team. We have a very experienced team. James isn't here with us, but if you've heard him in these presentations before, has been a leading shipbroker for many years, and is leading the team by example and continuing to broker, and is very supportive of bringing in additional broking resources. Our sectoral diversification within shipbroking, and you can see from what Tris told you earlier, pretty much all the markets have grown across the last six months and therefore we are in a particularly strong position. But the diversification across those markets will help when inevitably one or two of them might have a sort of downturn in terms of performance. Our performance therefore through the business cycle will benefit from that diversification and our stronger balance sheets will enable further growth, and potentially some M&A as we go forward. There are some other slides in the appendix. If you look at our website, we publish some data on the shipping markets. We don't necessarily plan to go through those, but are now therefore ready to take your questions. Fantastic. Thank you very much indeed for the presentation. Ladies and gentlemen, will you please continue to submit your questions just using the Q&A tab situated in the right-hand corner of your screen. Just while the team take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. Nick, Tris, as you can see, we've had a number of questions come through from investors today. If I may just ask you just to click on that Q&A tab, and where appropriate to do so, just read out the question and give your response, and I'll pick up from you at the end. Thank you. Okay. Well, I've got them to my right here. So the first one is around use of cash, which I will answer. The second one is around how technology is impacting the business, which I'll then encourage Tris to answer afterwards. So the question around use of cash is our strategy for more deals, and by that, I assume sort of M&A or team deals or distributions. I think what we do plan to do is to do a bit of both. We touched on earlier that we will keep our dividend moving forward. I think if you look at the expectations for next year within the analyst forecast, you'll see that there's a roughly three times cover between our earnings and our dividend, and I think that's something you might therefore expect to see maintained going forward. Clearly we, the business does generate significant cash when everything's going well. Therefore, we're in a strong position to be able to use that to bring teams in. Tris has mentioned one that we've already achieved, and there are others that we are looking at, as well as sort of small bolt-on M&A deals. This is, as I hope is clear, a growth story, but one that is supported by a sensible dividend strategy at the same time. Tris, the next one was, how is technology investment impacting the business? I think for us, specifically as a company, we have obviously a different approach to Clarksons. Clarksons operate to some extent as a technology business within a shipbroker. They have successfully grown new revenue streams by providing software to the shipping market. That's not something that we want to do. We try to form strategic partnerships with other businesses, other technology providers. We don't see us as being a creator of technology. I think sort of a good example of that is obviously we you know formed a partnership with Zoom Technologies, who were able to deliver a successful trading and data platform for our dry cargo team, which certainly you know reaps benefits and been a successful partnership to date and will continue to be so. I think with the rest of our chartering desks, we look to find solutions that will improve their workflow and basically just keep them at the head of the pack in so far as the value adds that they have as brokers, and that we're not getting left behind by other technology disruptors in our space. I don't think we see technology at the moment as a potential threat to the way that we execute business. I think obviously with the huge 30-year plus of transactional data that we have, you know, Braemar is in a very good position to provide that value added. It's just having the right platform for our brokers to access it and making sure that, you know, the other technology challenges out there, you know, are not gonna have that edge that we have from that kind of transactional data. You know, it's not something that we're, you know, we don't have huge budgets for spend on technology. It's very much, you know, we look to enhance our business, rather than diversify into becoming a technology business. Thank you. The next question is around speeding up our growth opportunities, and how I'm interpreting it is, are we constrained by people or capital? I'll give my thoughts first and then let Tris answer it. I mean, this business is all around people. In order to grow the business, in a way that we are setting our stall out to do, which is new teams, bolt-on acquisitions, it's more about finding the right people and the right acquisitions than needing a significant additional capital. I think that's also reinforced by Tris' answer to the last question around technology investment. Yeah. I think just sort of adding to what Nick's saying, I think, you know, when we're looking at acquisitions, we work to a fairly tight formula of what we're comfortable with. We certainly, you know, would only look to acquire or whether it's businesses or teams that have a direct impact on our bottom line from, you know, minute of completion. Next question is, will Braemar be affected by the Russian sanctions, and how will the sanctions alter the spot freight market in 2023? I think part of the message we've been giving over this last period is that the sanctions have increased the ton-miles in the markets in a number of sectors. Therefore, it increased the demand and reduced the supply of available ships. It clearly is at the moment having a beneficial impact. The spot freight market in 2023, I guess it rather depends what happens. Yeah. I mean, I think that it's a very difficult area to navigate, you know, what the actual impact will be, when the sanctions obviously take their new toll on December the fifth and then later on in February. I think, you know, we're always reluctant to say that, you know, we can benefit from a very unfortunate situation. It would seem that this remap of how oil and products is moving as a result of the Russia-Ukraine crisis. is having generally a positive effect for shipbrokers, in that, as I mentioned earlier, spot market activity and time charter has increased. I think probably as a result of what would've been fairly locked routes and suppliers having to change the way they go about doing their business, which ultimately means that they need to use brokers. Next one is a slightly harder question to answer in some ways. How are we distinguished from Clarksons? Sorry, Nick. Yeah, no. Please do. I just saw that one earlier, so I kind of prepared for it. I mean, I think obviously the most notable difference is the size. You know, Clarksons are roughly three times the size of us on pretty much every metric that you look at, you know, whether it's revenue, profitability, number of brokers, et cetera. I think we see that as a positive in that, you know, Braemar's kind of in a bit of a sweet spot for growth at the moment. It has certainly given us some momentum that we haven't reached the scale where it's quite difficult to know how much bigger we can get or where we really are. We identify quite easily areas that we can be bigger and we can have more brokers, and I think that gives us a little bit of an edge over Clarksons in that, you know, Clarksons are of such a size that they have that scale, they have that revenue. It's quite hard when you're sort of top of the league to stay there. I think sometimes it's good to be the chasing party. It certainly feels that way for us. I think we just have that little bit of agility that perhaps they don't have, and we're small enough that we can make very quick decisions about what we wanna do with the business. Next question is around the impending global recession and also the continuing China zero COVID policy and how that will impact our business. I mean, I'll perhaps just say first, we're not a container broker in any scale. Perhaps the most obvious impact from both of those factors is on the container market, where we've seen values and volumes drop off. Therefore that, in that sense, we are less exposed than if we were a significant container broker. I think Tris was mentioning earlier that, you know, even with an element of stability in the shipping market, and perhaps less demand or less geopolitical factors, the shipping fleet is aging and the ESG pressures are gonna continue to grow on the industry, which, you know, we think, rightly or wrongly, means that the demand for shipping is not likely to reduce in the short term. Yeah. I completely agree with Nick in that I think to date, the recession has had little impact on volume, possibly quite the opposite. I think that, as Nick said, you know, the impending fleet shrinkage and huge environmental pressures that are gonna come into the shipping market, you know, that in comparison with increased demand should mean that things remain buoyant over the next couple of years, irrespective of what's happening with China and global recession, et cetera. That's fantastic. I think you've covered off all the questions there, so thank you very much indeed. Of course, if there are any further questions that do come through, the team will be able to review those and will publish responses where appropriate to do so, on the Investor Meet Company platform. Nick, perhaps just before redirecting investors to give you their feedback, which I know is particularly important to you and the team, if I could just ask you for a few closing comments, that'd be fantastic. Yeah. Well, just thank you again for coming in and listening to the update. You know, the summary from our point of view is that, you know, things are very positive for Braemar at the moment in terms of the way that the business has been reordered and focused in markets which are actually very positive at the moment. We feel like we're in a good place. We've got plenty of opportunities in the market to capitalize on and continue to build the growth story. Yeah. No, I think the investments that we've made in people, technology, and new offices are definitely delivering growth for us. I think we have a diversified business model that means we're able to be profitable at all points in the cycle. We are increasing market share. Yeah, I think we're very well positioned moving forward. Fantastic. Nick, Tris, thanks again for updating investors today. Can I please ask investors not to close the session. You should be automatically redirected to provide your feedback and all the team can better understand your views and expectations. This will only take a few moments to complete and I know it's greatly valued by the company. On behalf of the management team at Braemar Plc, we would like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.