Delivering Objectives
Braemar's (L:BRMS) management has done much to reduce the likely impact of the shipping cycle in recent years, as emphasised in the current trading update. The 22% discount rating to its peer group, the strong balance sheet and the 6% yield offer sound defensive qualities to the shares.
Still on course
Braemar’s trading update highlights the group diversification strategy as a key factor behind trading in the year to February 2016 continuing on track to meet full-year market expectations. Strong activity in tanker markets, supplemented by useful Sale & Purchase business, is more than compensating for challenging conditions in dry cargo and offshore in the Shipbroking operations. Similarly, in Technical, the expected strong trading at Braemar Engineering (LNG tanker work) is more than balancing the impact of a tougher offshore market. Logistics continue to plan, with the further improvements to the longer-term outlook. We do not propose to adjust our estimates.
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