THE INFORMATION CONTAINED WITHIN
THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION AS
STIPULATED UNDER THE MARKET ABUSE REGULATION (EU NO. 596/2014)
WHICH IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT,
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
23 May
2024
BRAEMAR
PLC
("Braemar", the "Company" and together with its subsidiaries
the "Group")
Audited Final Results for
the year ended 29 February 2024
Strong trading performance
building resilience and sustainable returns for
shareholders,
with a platform for future
growth
Braemar Plc (LSE: BMS), a leading
provider of expert investment, chartering and risk management
advice to the shipping and energy markets, announces its audited
results for the year ended 29 February 2024 ("FY24"), which are in
line with market expectations[1].
The board is delighted to report
another strong performance for the Group, which demonstrates the
Group's strategy to grow the business, build resilience, and
generate sustainable shareholder returns across the shipping cycle.
Following the 51% increase in revenues in the prior year, FY24
revenues were sustained at £152.8 million (FY23: £152.9
million).
The strong performance from the
acquisitions completed in FY23 and the Group's growing securities
business contributed to a more balanced revenue mix, offsetting
weaker shipping rates in some sectors. Overall fixture volumes grew
by 8% and the increased breadth and depth of the Group's operations
helped deliver both a strong financial result for the year, and
build a platform for sustainable profitability in the years going
forward.
The Group generated underlying
operating profit of £16.5 million (FY23: £20.1 million), after a
negative £2.6 million foreign exchange swing over the previous year
and expensing £1.5 million of acquisition-related costs (£18.1
million before acquisition-related expenditure).
FY25 has started well, the Group
has entered the year with a total forward order book at 29 February
2024 of $82.6 million (FY23: $56.2 million) and looks forward to
continuing the successful execution of its growth strategy, through
hiring talented individuals, geographic expansion and making
selective acquisitions, while at all times maintaining a strong
focus on cost efficiencies and improving operating margins, as the
business continues to scale.
As a result, and reflecting the
board's confidence in the future of the business, the board has
recommended a final dividend for FY24 of 9.0 pence per share. Total
dividends for the year if approved will be 13.0 pence per share
(FY23: 12.0 pence), an increase of 8%.
RESULTS HIGHLIGHTS
Financial performance
|
Underlying results*
|
Statutory results
|
|
FY24
|
FY23
|
%
change
|
FY24
|
FY23
|
%
change
|
Revenue
|
£152.8m
|
£152.9m
|
-
|
£152.8m
|
£152.9m
|
-
|
Operating profit (before
acquisition-related expenditure)
|
£18.1m
|
£20.1m
|
-10%
|
£15.0m
|
£13.7m
|
+9%
|
Operating profit
|
£16.5m
|
£20.1m
|
-18%
|
£9.0m
|
£11.7m
|
-22%
|
Profit before tax
|
£14.6m
|
£18.0m
|
-19%
|
£7.5m
|
£9.5m
|
-20%
|
Profit after tax
|
£10.8m
|
£13.4m
|
-19%
|
£4.6m
|
£4.6m
|
-
|
Underlying earnings per share
(basic)
|
36.62p
|
46.22p
|
-21%
|
15.65p
|
15.85p
|
-1%
|
Total dividend per share
|
13.0p
|
12.0p
|
+8%
|
13.0p
|
12.0p
|
+8%
|
Net cash/(debt)
|
£1.0m
|
£6.9m
|
-86%
|
£1.0m
|
£6.9m
|
-86%
|
|
|
|
|
|
|
| |
* Underlying results measures
above are before specific items, including some acquisition-related
charges and internal independent investigation costs.
Financial highlights
· Revenue at £152.8 million was unchanged on the prior year,
demonstrating improved resilience across the Group (FY23: £152.9
million), with strong performances from acquisitions and Risk
Advisory offsetting cyclically weaker performances in other parts
of the business.
· Underlying operating profit before acquisition-related items
of £18.1m in line with market expectations1 (FY23:
£20.1m).
· Impact on operating profit of acquisition-related costs and
foreign exchange swing totalling £4.1m.
· Reported profit after tax for the year unchanged from prior
year at £4.6m.
· Balance sheet remains strong with positive cash position
maintained.
· Continuation of the Group's progressive dividend policy, with
a recommended final dividend for FY24 of 9.0 pence per share,
reflecting the board's confidence in the future of the business.
Total dividends for the year if approved will be 13.0 pence per
share (FY23: 12.0 pence) an increase of 8%.
Operational highlights
· Continued growth with total fixture numbers up 8% from the
prior year.
· Acquisitions of Southport Maritime Inc. in the USA and the
Madrid tanker desk in Spain performed well in their first full year
as part of the Group, realising the opportunities of being part of
Braemar's global business.
· Natural gas desk grew strongly throughout the
year.
· Headcount up 7% to 409 as the business continues to invest,
average revenue per head continues to be strong at £373,000, 6%
lower than the prior year.
· The
internal independent investigation commenced in June 2023 was
completed in October 2023.
Current trading and outlook
· FY25 has started well with market conditions remaining
positive - greater demand resulting from geo-political and natural
events on a broadly unchanged global fleet size.
· Continued execution of the growth
strategy, hiring talented individuals and teams, and through
selective acquisitions in the fragmented shipbroking market. This
will be supported by the Group's platform, driving ongoing
efficiencies, and improving margins.
· The Group's forward order book strengthened throughout the
year, standing at $82.6m as at 29 February 2024, 47% higher than
the $56.2m as at 28 February 2023.
· With the Group's strategy delivering and a clear focus on
future growth, the board looks to the future with
confidence.
James Gundy, Group Chief Executive Officer, commenting on the
Group's FY24 results, said:
"This was another year of strong performance. I am delighted
that it clearly shows how much more resilient and balanced Braemar
has become. In FY23, we enjoyed high rates and activity across all
sectors delivering a 51% increase in revenue. I am delighted that
this performance was sustained this year. We maintained FY23's
strong revenue levels through our growing securities business and
strong performances from our acquisitions, with overall fixture
volumes growing by 8%. We have built a platform that can support a
growing business and as we hire more brokers and make further
acquisitions, whilst maintaining a keen focus on cost management
and efficiencies, we will build greater resilience and further
improve operating margins.
The overall market outlook remains positive. Geo-political
and natural events, as well as environmental considerations are
leading to longer voyage times, and global seaborne trade continues
to grow, while the total fleet size remains at similar
levels.
We started FY25 with a strong forward order book at $82.6m,
and will continue to invest in our people, offices, and technology,
whilst taking advantage of a fragmented shipbroking market to hire
and make acquisitions. I look forward to another strong performance
by the Group."
Results Roadshow and Online Presentations
The Company is hosting a results
presentation for analysts on Thursday, 23 May 2024 at 10.30 a.m. at
Buchanan's offices at 107 Cheapside, London, EC2V 6DN. Please
contact the team at Buchanan via braemar@buchanan.uk.com
for further details.
In addition, the Company is also
hosting an online investor presentation with Q&A on Tuesday, 28
May 2024, commencing at 1 p.m. To participate, please register with
PI World at
https://bit.ly/BMS_FY24_webinar.
The 2024 Annual Report and
Accounts will be available on the Company's website
(www.braemar.com) shortly.
For
further information, contact:
Braemar Plc
|
|
|
James Gundy, Group Chief Executive
Officer
|
Tel +44 (0) 20 3142 4100
|
Grant Foley, Group Chief Financial
Officer
|
|
Rebecca-Joy Wekwete, Company
Secretary
|
|
|
|
|
|
Buchanan
|
|
Charles Ryland / Stephanie
Whitmore
Jack Devoy / Abby
Gilchrist
|
Tel +44 (0) 20 7466 5000
|
|
|
Investec Bank plc
|
|
Gary Clarence / Alice
King
|
Tel +44 (0) 20 7597 5970
|
|
|
Cavendish Securities PLC
Ben Jeynes / Matt Lewis (Corporate
Finance)
Leif Powis / Dale Bellis / Charlie
Combe (Sales & ECM)
|
Tel +44 (0) 20 7220 0500
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Income Statement
For the year ended 29 February 2024
|
|
|
|
|
Notes
|
Underlying
£'000
|
Specific items
£'000
|
Total
£'000
|
Underlying
£'000
|
Specific
items
£'000
|
Total
£'000
|
Revenue
|
2.1
|
152,751
|
-
|
152,751
|
152,911
|
-
|
152,911
|
Other operating income
|
2.2
|
-
|
83
|
83
|
-
|
3,846
|
3,846
|
Operating expense:
|
|
|
|
|
|
|
|
Operating costs
|
2.3,
2.2
|
(134,004)
|
(3,182)
|
(137,186)
|
(132,598)
|
(355)
|
(132,953)
|
Acquisition-related
expenditure
|
2.2
|
(1,502)
|
(4,405)
|
(5,907)
|
-
|
(1,999)
|
(1,999)
|
Impairment of financial
assets
|
2.3,
2.2
|
(697)
|
-
|
(697)
|
(238)
|
(848)
|
(1,086)
|
Impairment of goodwill
|
2.2
|
-
|
-
|
-
|
-
|
(9,050)
|
(9,050)
|
Total operating expense
|
|
(136,203)
|
(7,587)
|
(143,790)
|
(132,836)
|
(12,252)
|
(145,088)
|
Operating profit
|
|
16,548
|
(7,504)
|
9,044
|
20,075
|
(8,406)
|
11,669
|
|
|
|
|
|
|
|
|
Share of associate profit/(loss)
for the year
|
3.4
|
12
|
-
|
12
|
(23)
|
-
|
(23)
|
Finance income
|
2.5,
2.2
|
871
|
419
|
1,290
|
119
|
83
|
202
|
Finance costs
|
2.5,
2.2
|
(2,823)
|
-
|
(2,823)
|
(2,131)
|
(266)
|
(2,397)
|
Profit before tax from continuing
operations
|
|
14,608
|
(7,085)
|
7,523
|
18,040
|
(8,589)
|
9,451
|
Taxation
|
2.7
|
(3,788)
|
889
|
(2,899)
|
(4,641)
|
(214)
|
(4,855)
|
Profit from continuing operations
|
|
10,820
|
(6,196)
|
4,624
|
13,399
|
(8,803)
|
4,596
|
|
|
|
|
|
|
|
|
Profit attributable to
equity shareholders of the Company
|
|
10,820
|
(6,196)
|
4,624
|
13,399
|
(8,803)
|
4,596
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
Total
|
Underlying
|
|
Total
|
Earnings per ordinary share
|
|
|
|
|
|
|
|
Basic
|
2.8
|
36.62p
|
|
15.65p
|
46.22p
|
|
15.85p
|
Diluted
|
2.8
|
29.96p
|
|
12.80p
|
38.52p
|
|
13.25p
|
The accompanying notes form an integral part of
these Financial Statements.
Consolidated Statement of Comprehensive
Income
For the year ended 29 February 2024
|
Note
|
29 Feb 2024
£'000
|
28 Feb
2023
£'000
|
Profit for the year
|
|
4,624
|
4,596
|
Other comprehensive income/(expense)
|
|
|
|
Items that will not be reclassified to profit or
loss:
|
|
|
|
- Actuarial gain
on employee benefit schemes - net of tax
|
5.1
|
173
|
2,361
|
Items that may be reclassified to profit or
loss:
|
|
|
|
- Foreign
exchange differences on retranslation of foreign
operations
|
6.4
|
(1,783)
|
2,522
|
- Net investment
hedge
|
6.4
|
249
|
(124)
|
- Cash flow
hedges - net of tax
|
6.4
|
1,231
|
291
|
Other comprehensive (expense)/income
|
|
(130)
|
5,050
|
|
|
|
|
Total comprehensive income attributable to owners of the
parent
|
|
4,494
|
9,646
|
The accompanying notes form an integral part of
these Financial Statements.
Consolidated Balance Sheet
As at 29 February 2024
|
Note
|
As at
29 Feb 2024
£'000
|
As at
28 Feb 2023
£'000
|
Assets
|
|
|
|
Non-current assets
|
|
|
|
Goodwill
|
3.1
|
71,337
|
71,407
|
Other intangible assets
|
3.2
|
3,185
|
3,980
|
Property, plant and
equipment
|
3.5
|
5,582
|
5,320
|
Other investments
|
3.3
|
1,633
|
1,780
|
Investment in associate
|
3.4
|
713
|
701
|
Derivative financial
instruments
|
4.4
|
249
|
30
|
Deferred tax assets
|
2.7
|
2,979
|
4,794
|
Pension surplus
|
5.1
|
1,414
|
1,120
|
Other long-term
receivables
|
4.1
|
4,589
|
8,554
|
|
|
91,681
|
97,686
|
Current assets
|
|
|
|
Trade and other
receivables
|
4.2
|
37,730
|
43,323
|
Derivative financial
instruments
|
4.4
|
1,287
|
1,224
|
Current tax receivable
|
2.7
|
2,925
|
973
|
Cash and cash
equivalents
|
4.5
|
27,951
|
34,735
|
|
|
69,893
|
80,255
|
Total assets
|
|
161,574
|
177,941
|
|
|
|
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
Derivative financial
instruments
|
4.4
|
175
|
1,122
|
Trade and other
payables
|
4.3
|
43,611
|
57,310
|
Current tax payable
|
2.7
|
1,625
|
4,141
|
Provisions
|
7.1
|
3,080
|
2,575
|
Convertible loan notes
|
4.7
|
632
|
699
|
|
|
49,123
|
65,847
|
Non-current liabilities
|
|
|
|
Long-term borrowings
|
4.6
|
29,819
|
29,919
|
Deferred tax
liabilities
|
2.7
|
8
|
344
|
Derivative financial
instruments
|
4.4
|
183
|
1,022
|
Trade and other
payables
|
|
416
|
542
|
Provisions
|
7.1
|
58
|
734
|
Convertible loan notes
|
4.7
|
2,346
|
2,852
|
|
|
32,830
|
35,413
|
Total liabilities
|
|
81,953
|
101,260
|
Total assets less total liabilities
|
|
79,621
|
76,681
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
6.1
|
3,292
|
3,292
|
Share premium
|
6.1
|
-
|
53,796
|
ESOP reserve
|
6.3
|
(7,140)
|
(10,607)
|
Other reserves
|
6.4
|
8,365
|
28,819
|
Retained earnings
|
|
75,104
|
1,381
|
Total equity
|
|
79,621
|
76,681
|
Registered number: 02286034
Consolidated Cash Flow Statement
For the year ended 29 February 2024
|
Notes
|
29 Feb 2024
£'000
|
28 Feb 2023
£'000
|
Profit before tax
|
|
7,523
|
9,451
|
Adjustment for:
|
|
|
|
Depreciation and amortisation
charges
|
3.2,
3.5
|
3,805
|
3,364
|
Loss on disposal of intangible
assets
|
|
-
|
87
|
Net loss on disposal of property,
plant and equipment
|
|
-
|
20
|
Share scheme charges
|
|
6,442
|
4,520
|
Net foreign exchange loss/(gain)
with no cash impact
|
|
497
|
(1,157)
|
Gain on acquisition of
Southport
|
2.2
|
-
|
(3,643)
|
Gain relating to disposal of Cory
Brothers
|
2.2
|
(83)
|
(203)
|
Fair value loss on unlisted
investments
|
2.2
|
147
|
-
|
Impairment of Naves
goodwill
|
3.1
|
-
|
9,050
|
Impairment of property, plant and
equipment
|
3.5
|
-
|
150
|
Impairment of intangible
assets
|
3.2
|
-
|
60
|
Impairment of financial
asset
|
2.2
|
-
|
848
|
Reversal of dilapidations
provision
|
7.1
|
-
|
(124)
|
Adjustment for non-operating transactions included in profit
before tax:
|
|
|
|
Net finance cost
|
2.5
|
1,533
|
2,195
|
Share of (profit)/loss in
associate from continuing and discontinued operations
|
3.4
|
(12)
|
23
|
Adjustment for cash items in other comprehensive
income/expense:
|
|
|
|
Fair value movement on financial instruments charged
to profit or loss
|
|
89
|
-
|
Cash settlement of share-based payment
|
|
(52)
|
-
|
Contribution to defined benefit
scheme
|
5.1
|
(37)
|
(450)
|
Operating cash flow before changes in working
capital
|
|
19,852
|
24,191
|
|
|
|
|
Decrease/(increase) in
receivables
|
|
6,252
|
(14,857)
|
(Decrease)/increase in
payables
|
|
(12,142)
|
16,836
|
(Decrease)/increase in
provisions
|
|
(138)
|
2,081
|
Cash flows from operating activities
|
|
13,824
|
28,251
|
|
|
|
|
Interest received
|
|
508
|
119
|
Interest paid
|
|
(2,677)
|
(1,925)
|
Tax paid, net of
refunds
|
|
(6,473)
|
(4,381)
|
Net cash generated from operating
activities
|
|
5,182
|
22,064
|
Cash flows from investing activities
|
|
|
|
Purchase of property, plant and
equipment
|
3.5
|
(503)
|
(695)
|
Purchase of other intangible
assets
|
3.2
|
(32)
|
(90)
|
Acquisition of business (cash
acquired)
|
2.2
|
-
|
349
|
Proceeds related to disposal of
Cory Brothers
|
4.9
|
1,397
|
6,500
|
Principal received on finance
lease receivables
|
3.6
|
626
|
607
|
Net cash generated from investing
activities
|
|
1,488
|
6,671
|
|
|
-
|
|
Cash flows from financing activities
|
|
-
|
|
Proceeds from RCF loan
facility
|
|
4,500
|
7,694
|
Repayment of RCF loan
facility
|
|
(5,098)
|
(3,000)
|
Repayment of principal under lease
liabilities
|
3.6
|
(3,143)
|
(3,865)
|
Cash proceeds on issue of new
shares
|
6.1
|
-
|
694
|
Cash proceeds on exercise of share
awards settled by release of shares from ESOP
|
|
826
|
477
|
Dividends paid
|
6.2
|
(2,440)
|
(3,190)
|
Purchase of own shares
|
6.3
|
(6,125)
|
(7,963)
|
Settlement of convertible loan
notes
|
4.7
|
(598)
|
(1,448)
|
Net cash used in financing activities
|
|
(12,078)
|
(10,601)
|
|
|
|
|
(Decrease)/increase in cash and cash
equivalents
|
|
(5,408)
|
18,134
|
Cash and cash equivalents at
beginning of the year
|
4.5
|
34,735
|
13,964
|
Foreign exchange
differences
|
|
(1,376)
|
2,637
|
Cash and cash equivalents at end of the
year
|
4.5
|
27,951
|
34,735
|
|
|
|
|
The accompanying notes form an integral part of
these Financial Statements.
Consolidated Statement of Changes in Total
Equity
For the year ended 29 February 2024
|
Notes
|
Share
capital
£'000
|
Share
premium
£'000
|
ESOP
reserve
£'000
|
Other
reserves
£'000
|
Retained
(deficit)/ earnings
£'000
|
Total
equity
£'000
|
At 1 March
2022
|
|
3,221
|
53,030
|
(6,771)
|
26,130
|
(4,119)
|
71,491
|
Profit for the year
|
|
-
|
-
|
-
|
-
|
4,596
|
4,596
|
Actuarial gain on employee benefits schemes -
net of tax
|
|
-
|
-
|
-
|
-
|
2,361
|
2,361
|
Foreign exchange differences
|
|
-
|
-
|
-
|
2,522
|
-
|
2,522
|
Cash flow hedges - net of tax
|
|
-
|
-
|
-
|
291
|
-
|
291
|
Net investment hedge
|
|
-
|
-
|
-
|
(124)
|
-
|
(124)
|
Other comprehensive income
|
|
-
|
-
|
-
|
2,689
|
2,361
|
5,050
|
Total comprehensive income
|
|
-
|
-
|
-
|
2,689
|
6,957
|
9,646
|
|
|
|
|
|
|
|
|
Transactions with owners in their capacity as
owners:
|
|
|
|
|
|
|
|
Deferred tax income on share awards
|
|
-
|
-
|
-
|
-
|
863
|
863
|
Dividends
|
6.2
|
-
|
-
|
-
|
-
|
(3,190)
|
(3,190)
|
Shares issued
|
6.1
|
71
|
766
|
-
|
-
|
-
|
837
|
Acquisition of own shares
|
|
-
|
-
|
(7,963)
|
-
|
-
|
(7,963)
|
ESOP shares allocated
|
6.3
|
-
|
-
|
4,127
|
-
|
(3,650)
|
477
|
Share-based payments
|
5.2
|
-
|
-
|
-
|
-
|
4,520
|
4,520
|
|
|
71
|
766
|
(3,836)
|
-
|
(1,457)
|
(4,456)
|
At 28 February
2023
|
|
3,292
|
53,796
|
(10,607)
|
28,819
|
1,381
|
76,681
|
Profit for the year
|
|
-
|
-
|
-
|
-
|
4,624
|
4,624
|
Actuarial gain on employee benefits schemes -
net of tax
|
|
-
|
-
|
-
|
-
|
173
|
173
|
Foreign exchange differences
|
|
-
|
-
|
-
|
(1,783)
|
-
|
(1,783)
|
Net investment hedge
|
|
-
|
-
|
-
|
249
|
-
|
249
|
Cash flow hedges - net of tax
|
|
-
|
-
|
-
|
1,231
|
-
|
1,231
|
Other comprehensive income
|
|
-
|
-
|
-
|
(303)
|
173
|
(130)
|
Total comprehensive income
|
|
-
|
-
|
-
|
(303)
|
4,797
|
4,494
|
|
|
|
|
|
|
|
|
Transactions with owners in their capacity as
owners:
|
|
|
|
|
|
|
|
Tax on share awards
|
2.7
|
-
|
-
|
-
|
-
|
(205)
|
(205)
|
Dividends
|
6.2
|
-
|
-
|
-
|
-
|
(2,440)
|
(2,440)
|
Capital reduction
|
6.4
|
-
|
(53,796)
|
-
|
(20,151)
|
73,947
|
-
|
Acquisition of own shares
|
6.3
|
-
|
-
|
(6,125)
|
-
|
-
|
(6,125)
|
ESOP shares allocated
|
6.3
|
-
|
-
|
9,592
|
-
|
(8,766)
|
826
|
Cash paid for share-based
payments
|
5.2
|
-
|
-
|
-
|
-
|
(52)
|
(52)
|
Share-based payments
|
5.2
|
-
|
-
|
-
|
-
|
6,442
|
6,442
|
|
|
-
|
(53,796)
|
3,467
|
(20,151)
|
68,926
|
(1,554)
|
At 29 February
2024
|
|
3,292
|
-
|
(7,140)
|
8,365
|
75,104
|
79,621
|
The accompanying notes form an
integral part of these Financial Statements.
Notes to the Financial Statements
General information
Braemar plc (the "Company") is a public company
limited by shares incorporated in the United Kingdom under the
Companies Act. The Company is registered in England and Wales and
its registered address is 1 Strand, Trafalgar Square, London,
United Kingdom, WC2N 5HR. The consolidated Financial Statements of
the Company as at and for the year ended 29 February 2024 comprise
the Company and its subsidiaries (together referred to as the
"Group")
1 Basis of preparation
1.1 Basis of preparation and
forward-looking statements
The financial information set out
above does not constitute the Group's statutory accounts for the
years ended 28 February 2023 or 28 February 2022 but is derived
from those accounts. Statutory accounts for 2023 have been
delivered to the registrar of companies, and those for 2024 will be
delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified; (ii) did not include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report; and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
The financial information included
in this preliminary announcement has been prepared in accordance
with UK-adopted international accounting standards and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The Group expects to distribute
full accounts that comply with UK-adopted international accounting
standards and with the requirements of the Companies Act 2006.The
Financial Statements have been prepared under the historic cost
convention except for items measured at fair value as set out in
the accounting policies below.
The consolidated Financial Statements
incorporate the Financial Statements of Braemar Plc and all its
subsidiaries made up to 28 February each year or 29 February in a
leap year.
Subsidiaries are entities that are controlled
by the Group. Control exists when the Group has the rights to
variable returns from its involvement with an entity and has the
ability to affect those returns through its power over the entity.
The results of subsidiaries sold or acquired during the year are
included in the accounts up to, or from, the date that control
exists. All intercompany balances and transactions have been
eliminated in full.
Certain statements in this Annual Report are
forward-looking. Although the Group believes that the expectations
reflected in these forward-looking statements are reasonable, it
gives no assurance that these expectations will prove to have been
correct. These forward-looking statements involve risks and
uncertainties, so actual results may differ materially from those
expressed or implied by these forward-looking
statements.
The Group Financial Statements are presented in
sterling and all values are rounded to the nearest thousand
sterling (£'000) except where otherwise indicated.
New standards, amendments and interpretations
effective for the financial year beginning 1 March 2023
The following amendments to IFRS Accounting
Standards have been applied for the first time by the
Group:
• IFRS 17 "Insurance Contracts" (including the
June 2020 and December 2021 Amendments to IFRS 17);
• Amendments to IAS 12 "Income Taxes" -
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction;
• Amendments to IAS 1 "Presentation of
Financial Statements" and IFRS Practice Statement 2 "Making
Materiality Judgements - Disclosure of Accounting
Policies";
• Amendments to IAS 12 "Income Taxes -
International Tax Reform - Pillar Two Model Rules";
• Amendments to IAS 8 "Accounting Polices,
Changes in Accounting Estimates and Errors - Definition of
Accounting Estimates".
The Group has adopted the amendments to IAS 1
in the current year. The amendments change the requirements in IAS
1 with regard to disclosure of accounting policies. The amendments
replace all instances of the term 'significant accounting policies'
with 'material accounting policy information'. Accounting policy
information is material if, when considered together with other
information included in an entity's financial statements, it can
reasonably be expected to influence decisions that the primary
users of general purpose financial statements make on the basis of
those financial statements. The Group has reviewed the impact of
the changes to IAS 1, which has resulted in some immaterial
accounting policies being removed and updates to the presentation
of the financial statements to aid users in their understanding and
navigation.
The adoption of the above has not had any
material impact on the amounts reported or the disclosures in these
financial statements.
New standards, amendments and interpretations
issued but not yet effective for the financial year beginning 1
March 2023 and not early adopted
There are a number of standards, amendments to
standards, and interpretations which have been issued by the IASB
that are effective in future accounting periods that the Group has
decided not to adopt early.
The following amendments are effective in
future periods and have not been early adopted by the
Group:
- Sale or
Contribution of Assets between an Investor and its Associate or
Joint Venture (Amendments to IFRS 10 and IAS 28);
- Classification
of Liabilities as Current or Non-current (Amendments to IAS
1);
- Non-current
Liabilities with Covenants (Amendments to IAS 1);
- Supplier Finance
Arrangement (Amendments to IAS 7 and IFRS 7);
- Lease Liability
in a Sale and Leaseback (Amendments to IFRS 16).
The adoption of these standards and amendments
is not expected to have a material impact on the Financial
Statements of the Group in future periods.
In January 2020, the IASB issued amendments to
IAS 1, which clarify the criteria used to determine whether
liabilities are classified as current or non-current. These
amendments clarify that current or non-current classification is
based on whether an entity has a right at the end of the reporting
period to defer settlement of the liability for at least 12 months
after the reporting period. The amendments also clarify that
"settlement" includes the transfer of cash, goods, services, or
equity instruments unless the obligation to transfer equity
instruments arises from a conversion feature classified as an
equity instrument separately from the liability component of a
compound financial instrument. Following concerns raised by
stakeholders, the IASB issued further amendments in October 2022 to
specify that only those covenants which an entity must comply with
on or before the reporting period should affect classification of
the corresponding liability as current or non-current. The October
2022 amendments defer the effective date of the January 2020
amendments by one year in order that both sets of amendments are
effective for annual reporting periods beginning on or after 1
January 2024 with earlier application permitted.
Under the Group's current accounting policy, a
financial liability with an equity conversion feature is classified
as current or non-current disregarding the impact of the conversion
option. The amendments to IAS 1 will result in the equity
conversion feature relating to certain of the Group's financial
liabilities, impacting the classification of those liabilities.
While the Group's assessment of the impact is ongoing, the Group
expects that amounts included as non-current in relation to
"Convertible Loan Notes" will be reclassified to current
liabilities.
1.2 Going concern
The Group Financial Statements
have been prepared on a going concern basis. In reaching this
conclusion regarding the going concern assumption, the directors
considered cash flow forecasts to 31 August 2025
which is more than 12
months from the date of issue of these
Financial Statements.
A set of cash flow forecasts ("the
base case") have been prepared by management to cover the going
concern period and reviewed by the directors based on revenue and
cost forecasts considered reasonable in the light of work done on
budgets for the current year and the current shipping markets. In
putting together these forecasts, particular attention was paid to
the following factors:
· Expected market demand, the impact on market rates and the
Group's forward order book.
· The
Group's compliance with sanctions put in place as a result of the
conflict in the Ukraine has meant additional work reviewing
compliance obligations on a regular basis as the laws have been
amended but did not have a material effect on trading in FY24, nor
is it expected to have an impact in FY25.
· The
level of likely cost inflation, particularly around
salaries.
· Geopolitical tensions can cause volatility in shipping
markets, but, if anything, that uncertainty can give rise to
additional opportunities for the business to support the industry
and clients further. There is therefore no expectation that the
current global political tensions will have an adverse impact on
trading in FY25.
· The
impact of climate change is not expected to have any material
impact on the business in the short term and indeed could lead to
additional opportunities.
The directors have considered
trading performance during the current year and have concluded that
none of these factors are currently likely to have a significantly
adverse impact on the Group's future cash flows.
The Group continues to have a
strong balance sheet, as at 29 February 2024 the Group held
net bank cash of £1.0 million (2023: £6.9 million). As at 30 April
2024 the Group had net bank cash of £8.9
million.
|
Notes
|
30 April 2024
£m
|
29 Feb 2024
£m
|
28 Feb 2023
£m
|
Secured revolving credit
facilities
|
4.6
|
(23.0)
|
(27.0)
|
(27.8)
|
Cash
|
4.5
|
31.9
|
28.0
|
34.7
|
Net cash
|
|
8.9
|
1.0
|
6.9
|
The Group continued to maintain a
revolving credit facility ("RCF") with its main bankers, HSBC
throughout the year. The RCF is for £30.0 million plus an accordion
limit of £10.0 million and has an initial termination date of
November 2025 with an option, subject to lender approval, to extend
the term of the facility by 24 months. Drawdown of the accordion
facility is subject to additional credit approval. It has an
EBITDA leverage covenant of 2.5x and a minimum interest cover of
4x. At 31 May 2023, 31 August 2023, 30 November 2023 and 29
February 2024 the Group met all financial covenant tests. In
addition, there is a further requirement to provide HSBC with the
Group's audited financial statements within six months of the
year-end. Due to the delay in completing the FY23 audited financial
statements, the Group obtained waivers for this in advance so there
was no breach of this requirement.
The cash flow forecasts in the
base case assessed the ability of the Group to operate both within
the banking covenants and the facility headroom, including a number
of downside sensitivities on budgeted revenue, including a reverse
stress test scenario. The directors consider revenue as the key
assumption in the Group's budget. The cost base is largely fixed or
made up of discretionary bonuses, which are directly linked to
profitability. Based on two flex scenarios; a revenue
decrease of 7.5% and a revenue decrease of 15% from the base case,
only very minor mitigations were necessary to meet banking
covenants.
A reverse stress test was also
performed to ascertain the point at which the covenants would be
breached in respect of the key assumption of budgeted revenue
decline. This test indicated that the business, alongside certain
mitigating actions which are fully in control of the directors,
would be capable of withstanding a reduction of approximately 38%
in budgeted revenue from the base case assumptions from March 2024
through to May 2025. In light of current trading, forecasts and the
Group's performance over FY24, the directors assessed this downturn
in revenue and concluded the likelihood of such a reduction remote,
especially in the light of the forward order book of $83m at the
end of February 2024 ($38m of which is for the financial year
ending February 2025), such that it does not impact the basis of
preparation of the Financial Statements and there is no material
uncertainty in this regard.
1.3 Use of estimates and critical
judgements
The preparation of the Group's Financial
Statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and the disclosure of contingent
liabilities, at the reporting date. Estimates and judgements are
continually evaluated based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions. Key
estimates are those that the Group has made in the process of
applying the Group's accounting policies and that have a
significant risk of resulting in material adjustments to the
carrying amounts of assets and liabilities within the next
financial year. Critical judgements are those that the Group makes,
apart from those involving estimations, that the directors have
made in the process of applying the Group's accounting policies and
that have the most significant effect on the amounts recognised in
the Financial Statements.
The following table provides a summary of the
Group's key estimates and critical judgements, along with the
location of more detailed information relating to those
judgements.
Judgement
applied to
|
Judgements
excluding estimates
|
Estimates
|
Location of
further information
|
Acquisition accounting for business
combinations
|
Yes
|
Yes
|
Note 1.4a - Business Combinations
|
Revenue recognition
|
Yes
|
|
Note 2a - Revenue Recognition
|
Classification and recognition of
specific items
|
Yes
|
|
Note 2.2 - Specific items
|
Impairment of goodwill
|
|
Yes
|
Note 3.1 - Goodwill
|
Provision for impairment of trade
receivables and contract assets
|
|
Yes
|
Note 4.2 - Trade and other
receivables
|
Measurement of deferred and
contingent consideration receivable
|
|
Yes
|
Note 4.8 - Deferred and contingent consideration
receivable
|
Recoverability and valuation of
defined benefit pension scheme
|
Yes
|
Yes
|
Note 5.1 - Long-term employee
benefits
|
Share option vesting
|
|
Yes
|
Note 5.2 - Share-based payments
|
Uncertain commission
obligations
|
|
Yes
|
Note 7.1 - Provisions
|
Climate‐related risks and opportunities
Management has considered the impact of
climate-related risks in respect of impairment of goodwill,
recoverability of receivables and the recoverability of deferred
tax assets in particular and does not consider that
climate‐related risks have a material
impact on any key judgements, estimates or assumptions in the
consolidated Financial Statements.
In the prior year, climate change was assessed
as part of ongoing discussions of key and emerging risks for the
Group and the shipping and energy sectors within which it operates.
Consideration of the potential short to medium-term impact of the
Environment and Climate Change risk resulted in its inclusion as a
Group Principal Risk.
1.4 Material accounting
policies
The accounting policies applied by the Group in
relation to specific transactions and balances are disclosed in the
note to which they relate. The following section includes those
accounting policies which apply pervasively across the Financial
Statements and to avoid repetition are disclosed in this
note.
a) Business combinations
Key
estimate
Acquisition accounting
Business combinations are accounted
for under the acquisition method, based on the fair values of the
consideration paid. Assets and liabilities, with
limited exceptions, are measured at their fair value at the
acquisition date. The Group estimates the provisional fair values
and useful lives of acquired assets and liabilities at the date of
acquisition. The valuation of acquired intangibles is subject to
estimation of future cash flows and the discount rate applied
to them. The valuation of the customer-related intangible assets is
determined based on an excess earnings methodology while the
valuation of the marketing-related intangible asset is based on a
royalty savings method.
Key
judgement
Assessment of business combinations
During the prior year, the Group acquired the
entity Madrid Shipping Advisors S.L. For a business combination to
exist, the Group must obtain control of a business. To be
considered a business, an acquired set of activities and assets
must include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create outputs.
As part of the transaction, no assets were acquired (such as brand,
order book, property, plant and equipment), nor were any
liabilities assumed. The entity holds the service contracts for key
employees and was a newly incorporated company, set up specifically
for the acquisition. The Group has made the judgement that the
acquisition did not meet the definition of a business combination
as the acquired entity did not meet the definition of a business.
The transaction was treated as the recruitment of a broker team,
which is consistent with the substance of the
arrangement.
|
The acquisition method of accounting is used to
account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration
transferred for the acquisition of a subsidiary comprises
the:
- fair values of
the assets acquired;
- liabilities
incurred to the former owners of the acquired business;
- equity interests
issued by the Group;
- fair value of
any asset or liability resulting from a contingent consideration
arrangement; and
- fair value of
any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at
the acquisition date. The Group recognises any non-controlling
interest in the acquired entity on an acquisition-by-acquisition
basis either at fair value or at the non-controlling interest's
proportionate share of the acquired entity's net identifiable
assets.
Acquisition-related costs are expensed as
incurred.
The excess of the consideration transferred;
amount of any non-controlling interest in the acquired entity; and
acquisition-date fair value of any previous equity interest in the
acquired entity over the fair value of the net identifiable assets
acquired is recorded as goodwill. If those amounts are less than
the fair value of the net identifiable assets of the business
acquired, the difference is recognised directly in profit or loss
as a gain on purchase.
Where settlement of any part of cash
consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The
discount rate used is the entity's incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from
an independent financier under comparable terms and
conditions.
Contingent consideration is classified either
as equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair value, with
changes in fair value recognised in profit or loss.
If the business combination is achieved in
stages, the acquisition date carrying value of the acquirer's
previously held equity interest in the acquiree is remeasured to
fair value at the acquisition date. Any gains or losses arising
from such remeasurement are recognised in profit or
loss.
Due to the nature of the Group's business,
amounts paid or shares issued to sellers are often linked to their
continued employment. An assessment is performed to determine
whether the amounts are part of the exchange for the acquiree, or
should be treated as a transaction separate from the business
combination. Transactions that are separate from the business
combination are accounted for in accordance the relevant IFRSs
which generally results in the amounts being treated as a
post-combination remuneration expense.
b) Foreign currencies
Transactions
and balances
Transactions in currencies other than sterling
are recorded at the rates of exchange prevailing on the date of the
transaction. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currency are recognised in the Income
Statement.
In order to hedge its exposure to certain
foreign exchange risks, the Group enters into derivative financial
instrument contracts, mainly forward foreign currency exchange
contracts which are designated as cash flow hedges (see Note 4.4).
For a qualifying hedge relationship, the fair value gain or loss on
the hedging instrument is recognised as part of revenue when the
underlying transaction is recognised in accordance with the Group's
revenue recognition policy.
Translation
to presentation currency
The presentational currency of the Group is
sterling. Assets and liabilities of overseas subsidiaries, branches
and associates are translated from their functional currency into
sterling at the exchange rates ruling at the Balance Sheet date.
Trading results are translated at the average rates for the period.
Exchange differences arising on the consolidation of the net assets
of overseas subsidiaries are recognised through other comprehensive
income in the foreign currency translation reserve (see Note
6.4).
On disposal of a business, the cumulative
exchange differences previously recognised in the foreign currency
translation reserve relating to that business are transferred to
the Income Statement as part of the gain or loss on disposal. The
Group finances overseas investments partly through the use of
foreign currency borrowings in order to provide a net investment
hedge over the foreign currency risk that arises on
translation of its foreign currency subsidiaries. For effective
hedge relationships, the gain or loss on the hedging instrument is
recognised in equity through other comprehensive income.
c) Impairment
The carrying amount of the Group's assets,
other than financial assets within the scope of IFRS 9 and deferred
tax assets, are reviewed for impairment as described below. If any
indication of impairment exists, the asset's recoverable amount is
estimated. The recoverable amount is determined based on the higher
of value-in-use calculations and fair value less costs to sell,
which requires the use of estimates. An impairment loss
is recognised in the Income Statement whenever the carrying
amount of the assets exceeds its recoverable amount.
Goodwill is reviewed for impairment at least
annually. Impairments are recognised immediately in the Income
Statement. Goodwill is allocated to cash-generating units for the
purposes of impairment testing.
The carrying value of intangible assets with a
finite life is reviewed for impairment whenever events or changes
in circumstances indicate that the carrying value may not be
recoverable. The carrying values of other intangible assets
are reviewed for impairment at least annually or when there is an
indication that they may be impaired.
Right-of-use assets are reviewed for impairment
to account for any loss when events or changes in circumstances
indicate the carrying value may not be fully
recoverable.
Where there is objective evidence that the
investment in an associate has been impaired, the carrying amount
of the investment is tested for impairment in the same way as other
non-financial assets.
Where an impairment loss subsequently reverses,
the carrying amount of the assets, with the exception of goodwill,
is increased to the revised estimate of its recoverable amount.
This cannot exceed the carrying amount prior to the impairment
charge. An impairment recognised in the Income Statement in respect
of goodwill is not subsequently reversed.
d) Contingent assets
Contingent assets are not recognised but are
disclosed where an inflow of economic benefits is
probable.
2 Performance-related information
Revenue recognition
Key
judgement
Revenue recognition
IFRS 15 "Revenue from Contracts with Customers"
requires judgement to determine whether revenue is recognised at a
"point in time" or "over time" as well as determining the
transfer of control for when performance obligations are
satisfied.
For Chartering, in relation to single voyages,
the Group has defined the performance obligation to be satisfied at
the point in time where the negotiated contract between
counterparties has been successfully completed, being the discharge
of cargoes, and therefore revenue is recognised at this point in
time. This is a critical judgement since revenue recognition would
differ if the performance obligations were deemed to be satisfied
over a time period, or at a different point in time. For time
charters, the performance obligation is to provide operational
support and act on behalf of the principal over the course of hire.
As a result, the Group believes the performance obligation is
satisfied over the period of hire and revenue is recognised
accordingly.
|
Revenue is recognised in accordance with
satisfaction of performance obligations. Revenue of the Group
consists of:
i)
Chartering desks - The Group acts as a broker
for several types of shipping transactions, each of which gives
rise to an entitlement to commission:
Deep Sea
Tankers, Specialised Tankers and Gas, Dry Cargo and
Offshore:
-
for single voyage chartering, the contractual terms are
governed by a standard charterparty contract in which the broker's
performance obligation is satisfied when the cargo has been
discharged according to the contractual terms; and
-
for time charters, the commission is specified in the hire
agreement and the performance obligation is spread over the term of
the charter at specified intervals in accordance with the charter
party terms.
ii) Risk
Advisory desks
Securities:
-
for income derived from commodity broking, the commission is
recognised when a binding contractual arrangement is entered into
between the two parties, at which point, the Group has fulfilled
its performance obligation.
iii) Investment Advisory
Financial:
-
income comprises retainer fees and success fees generated by
corporate finance-related activities. Revenue is recognised in
accordance with the terms agreed in individual client terms of
engagement. Recurring monthly retainers allow customers to benefit
from services when required, and as such, are generally recognised
in the month of invoice. Success fees are recognised at the point
when the performance obligations of the particular engagement
are fulfilled.
Sale and
Purchase:
-
in the case of second-hand sale and purchase contracts, the
broker's performance obligation is satisfied when the principals in
the transaction complete on the sale/purchase and the title of the
vessel passes from the seller to the buyer;
-
with regard to newbuilding contracts, the commission is
recognised when contractual stage payments are made by the
purchaser of a vessel to a shipyard which in turn reflects the
performance of services over the life of the contract;
and
-
for income derived from providing ship and fleet valuations,
the Group recognises income when a valuation certificate is
provided to the client and the service is invoiced.
Dividend income from investments is recognised
when the right to receive payment is established.
2.1 Business segments
Based on the way in which information is
presented to the Group's Chief Operating Decision Maker, the
Group's operating segments are Chartering, Investment Advisory and
Risk Advisory. The Chief Operating Decision Maker is considered to
be the Group's board of directors. These three segments are managed
separately on the basis of the nature of the services offered to
clients and differences in the regulatory environment applicable to
each segment.
The table below shows the make-up of the
Groups segments by underlying component.
|
|
Segment
|
Chartering
|
Component
|
Deep Sea Tankers
Specialised Tankers
Offshore
Dry Cargo
|
Segment
|
Investment
Advisory
|
Component
|
Corporate Finance
Sale and Purchase
|
Segment
|
Risk
Advisory
|
Component
|
Securities
|
Each of Chartering, Investment Advisory and
Risk Advisory are managed separately, and the nature of the
services offered to clients is distinct between the segments. The
Chartering segment includes the Group's shipbroking business, Risk
Advisory includes the Group's regulated securities business and
Investment Advisory focuses on transactional
services.
The segmental analysis is consistent with the
way the Group manages itself and with the format of the Group's
internal financial reporting. The board considers the
business from both service line and geographic perspectives. A
description of each of the lines of service is provided in the
Operating and Financial Review. The Group's main geographic markets
comprise the UK, Singapore, the US, Australia, Switzerland, Germany
and the Rest of the World. The Group's geographical markets are
determined by the location of the Group's assets and
operations.
Central costs relate to board costs and other
costs associated with the Group's listing on the London Stock
Exchange. All segments meet the quantitative thresholds required by
IFRS 8 as reportable segments.
Underlying operating profit is defined as
operating profit for continuing activities before specific items,
including restructuring costs, gain/loss on disposal of investments
and acquisition and disposal-related items.
The segmental information provided to the
board for reportable segments for the year ended 29 February 2024
is as follows:
|
|
|
|
2024
£'000
|
2023
£'000
|
2024
£'000
|
2023
£'000
|
Chartering
|
103,945
|
99,164
|
13,630
|
15,577
|
Investment Advisory
|
25,696
|
36,760
|
3,872
|
7,740
|
Risk Advisory
|
23,110
|
16,987
|
4,086
|
2,971
|
Trading segments revenue/results
|
152,751
|
152,911
|
21,588
|
26,288
|
Central costs
|
|
|
(5,040)
|
(6,213)
|
Underlying operating profit
|
|
|
16,548
|
20,075
|
Specific items included in
operating profit
|
|
|
(7,504)
|
(8,406)
|
Operating profit
|
|
|
9,044
|
11,669
|
Share of associate's profit/(loss)
for the year
|
|
|
12
|
(23)
|
Net finance expense
|
|
|
(1,533)
|
(2,195)
|
Profit before taxation
|
|
|
7,523
|
9,451
|
Geographical segment - by origin
The Group manages its business segments on a
global basis. The operation's main geographical area and also the
home country of the Company is the United Kingdom.
Geographical information determined by
location of customers is set out below:
|
|
|
2024
£'000
|
2023
£'000
|
United Kingdom
|
81,088
|
80,353
|
Singapore
|
19,885
|
26,674
|
Australia
|
9,556
|
16,599
|
Switzerland
|
5,863
|
11,112
|
United States
|
20,479
|
6,255
|
Germany
|
1,287
|
2,951
|
Rest of the World
|
14,593
|
8,967
|
Total
|
152,751
|
152,911
|
Revenue analysis
The Group disaggregates revenue in line with
the segmental information presented above and also by desk. Revenue
analysed by desk is provided below.
|
|
|
2024
£'000
|
2023
£'000
|
Tankers
|
|
|
54,656
|
41,602
|
Specialised Tankers
|
|
|
19,239
|
16,240
|
Dry Cargo
|
|
|
22,139
|
35,821
|
Offshore
|
|
|
7,911
|
5,501
|
Chartering total
|
|
|
103,945
|
99,164
|
Sales and purchase
|
|
|
23,543
|
32,060
|
Corporate finance
|
|
|
2,153
|
4,700
|
Investment Advisory total
|
|
|
25,696
|
36,760
|
Securities
|
|
|
23,110
|
16,987
|
Risk Advisory total
|
|
|
23,110
|
16,987
|
Total continuing operations
|
|
|
152,751
|
152,911
|
All revenue arises from the rendering of
services. There is no single customer that contributes greater than
10% of the Group's revenue.
Remaining performance obligations
The Group enters into some contracts which are
for a duration longer than twelve months and where the Group has
outstanding performance obligations on which revenue has not yet
been recognised at the Balance Sheet date. The amount of revenue
that will be recognised in future periods on these contracts when
those remaining performance obligations are satisfied is set out
below:
Forward order book
2024
|
Within
12 months
£'000
|
1-2 years
£'000
|
More than
2 years
£'000
|
Total
£'000
|
Chartering
|
18,686
|
4,904
|
8,925
|
32,515
|
Sale and purchase
|
11,562
|
9,567
|
11,683
|
32,812
|
Total
|
30,248
|
14,471
|
20,608
|
65,327
|
2023
|
Within
12 months
£'000
|
1-2
years
£'000
|
More
than
2 years
£'000
|
Total
£'000
|
Chartering
|
19,209
|
3,040
|
9,860
|
32,109
|
Sale and purchase
|
3,332
|
4,988
|
6,168
|
14,488
|
Total
|
22,541
|
8,028
|
16,028
|
46,597
|
2.2 Specific items
Specific items are significant items considered
material in size or nature (including acquisition and
disposal-related gains and losses) as well as items which are not
considered to be part of the trading performance of the business in
the current year. These are disclosed separately to enable a full
understanding of the Group's ongoing financial performance, but may
not be comparable with disclosures provided by other companies. The
Group's adjusted performance measures are reviewed by the Group's
Chief Operating Decision Maker and are used as the basis to
determine the discretionary bonus pools and measure earnings per
share performance related to targets for awards under the Group's
Long Term Incentive Plan.
Key judgement
Classification and recognition of specific
items
In reporting financial information, the Group
presents Alternative Performance Measures ("APMs") which are not
defined or specified under the requirements of International
Financial Reporting Standards ("IFRS"). The Group believes that
these APMs, which are not considered to be a substitute for or
superior to IFRS measures, provide stakeholders with additional
helpful information and enable an alternative comparison of
performance over time.
The Group excludes specific items from its
underlying earnings measures. Management judgement is required as
to what items qualify for this classification. There can also be
judgement as to the point at which costs should be recognised and
the amount to record to ensure that the understanding of the
underlying performance is not distorted. Further details of the
Group's specific items are included in the note below.
|
|
2024
£'000
|
2023
£'000
|
Other operating income:
|
|
|
- Gain on purchase of
Southport
|
-
|
3,643
|
- Gain on revaluation of Cory
contingent consideration receivable
|
83
|
203
|
|
83
|
3,846
|
Operating costs:
|
|
|
- Commission obligation
|
-
|
(257)
|
- Investigation costs
|
(2,616)
|
-
|
- Board change costs
|
(190)
|
-
|
- Unlawful dividend
rectification
|
(229)
|
-
|
- Impairment of financial
assets
|
-
|
(848)
|
- Impairment of
goodwill
|
-
|
(9,050)
|
- Other operating costs
|
(147)
|
(98)
|
|
(3,182)
|
(10,253)
|
Acquisition-related items:
|
|
|
- Consideration treated as an
employment expense
|
(3,580)
|
(1,325)
|
- Madrid post-contractual
obligation
|
(376)
|
(264)
|
- Acquisition of Naves Corporate
Finance GmbH
|
-
|
(60)
|
- Amortisation of acquired
intangible assets
|
(449)
|
(350)
|
|
(4,405)
|
(1,999)
|
Other items:
|
|
|
- Finance income - Cory Brothers
earnout deferred consideration receivable
|
86
|
83
|
- Finance income/(expense) -
foreign exchange and derivative gain/(loss) on Naves
liability
|
333
|
(266)
|
|
419
|
(183)
|
|
|
|
Total
|
(7,085)
|
(8,589)
|
Other operating income
A gain on purchase in relation to the
acquisition of Southport was recognised in the prior year. The
Group does not consider this gain to reflect the performance of the
business in the year, and so is treated as a specific
item.
Revaluation of the contingent receivable due in
respect of the Cory Brothers disposal resulted in a gain of £0.1
million (2023: £0.2 million). See Note 4.9 for further
details.
The tax charge on specific items included
within other operating income was £nil (2023: £nil).
Operating costs
Investigation
costs
During the preparation of the 2023 Annual Report,
the board instigated an investigation into a transaction which
originated in 2013 and involved payments being made through to
2017. The investigation engaged multiple external specialist firms
and resulted in a significant cost to the business of £2.6 million
in the year to 29 February 2024 which the Group does not consider
reflects the trading of the business in the year and as a result is
treated as a specific item. No significant further costs are
expected in FY25.
Board change
costs
The Group appointed a new Chief Financial Officer
with effect from 1 August 2023 to replace Nick Stone who left on 31
July 2023. The recruitment costs incurred of £0.2 million are not
considered part of the trading performance of the business and so
are treated as specific items.
Unlawful dividend
rectification
Following the identification of the payment of
historic unlawful dividends, the Group incurred costs of £0.2
million in relation to their rectification, which are not expected
to recur, are not considered part of the trading performance of the
business and so are treated as specific items.
Commission obligation
In the prior year, as set out in
Note 7.1 Provisions, the Group recognised a provision in relation
to an uncertain commission obligation. During the prior year, an
amount of £0.3 million was recognised to
increase the provision. Due to the nature of the provision being an
historical transaction and not related to current trading, the
Group treated the cost as a specific item.
Impairment of financial asset
In the prior year, an impairment
charge of £0.8 million was recognised in
relation to a disputed staff loan with an
ex-employee of our Indian operations. Since no significant progress
had been made with the ongoing legal case it is now the opinion of
the directors that recovery of this debt is unlikely. Due to the
size of the impairment and the fact that the original debt arose
several years previously and is not related to trading, this
impairment charge is not deemed to relate to the performance of the
business and as such was treated as a specific item.
Impairment of goodwill
In the prior year, an impairment of
goodwill of £9.1 million was recognised in
relation to the goodwill allocated to the Corporate Finance
business. The Group does not believe that this impairment reflected
the performance of the business during the year, and as such, was
treated as a specific item.
Other operating costs
In the current year, operating
costs includes the fair value loss on the revaluation of the
Group's investment in London Tanker Brokers Panel. Consistent with
the previous revaluation gain being included as a specific item,
the Group has treated the current year loss as a specific item as
it does not relate to the trading performance of the business in
the year. In the prior year, the final transaction costs of £0.1
million related to disposals in the
preceding year were received.
The tax income on specific items
included within operating costs was £0.7 million
(2023: £0.1million)
Acquisition-related items
Consideration treated as an employment
expense
Following the acquisition of Southport
Maritime Inc. in December 2022, due to the requirement for ongoing
employee service, the upfront cash payment of £6.0 million and IFRS
2 charge related to share awards made to the sellers and existing
employees of Southport are treated as a post-combination
remuneration expense. The total expense for the year related to
amounts linked to ongoing employee service in connection with the
acquisition of Southport was £3.6 million (2022: £1.3 million). The
period of required employee service is three years from the
acquisition date.
Madrid
post-contractual obligation
As a result of the recruitment of
a team of brokers based in Madrid, service agreements were entered
into with employees. The recruitment of the broker team in Madrid
included the following key elements:
- The Group assumed a liability of £0.3 million for a
post-contractual payment to the employees, which was fully vested
on signing the contracts.
- An upfront cash payment of £1.3 million with a further
payment of £1.3 million made in December 2023.
- Share awards to a total value of £1.1 million which vest
evenly in one, two and three years from December 2022
The upfront payments and share
awards have a clawback mechanism which is linked to the continued
employment of the brokers over a three-year period from December
2022. The costs associated with the upfront payments and share
awards are not considered by the Group to be specific items as they
relate to the recruitment of brokers and not a business
combination, but are disclosed as acquisition-related expenditure
given their size and will be amortised over three years to December
2025. In addition, certain brokers are entitled to a payment on
termination in return for a non-compete obligation. The cost
related to the post-contractual payment obligation is treated as a
specific item because it is akin to a transaction cost with no
requirement to provide service. The Group recognised a cost of £0.4
million during the year in relation to this obligation (2023: £0.3
million).
Acquisition
of Naves Corporate Finance GmbH
In the prior year, the Group incurred total
costs of £0.1 million in relation to employment costs due to the
management sellers conditional on their ongoing service to the
Group. As the service condition was satisfied in the prior year
there is no further employment cost to be recognised.
Amortisation
of acquired intangible assets
An amount of £0.4 million
(2022: £0.4 million) relates to the amortisation
of acquired intangible assets, primarily in relation to intangible
assets recognised as a result of the acquisition of Southport
Inc.
The tax income on
acquisition-related items was £0.1 million (2023: £0.1 million).
The tax effect of expenses not deductible for tax was £1
million.
Other specific items
Cory
brothers earnout deferred consideration
receivable
The unwinding of the discounting
of the deferred receivable due in respect of the Cory Brothers
disposal contributed interest income of £0.1 million
(2023: £0.1m). See Note 4.9 for further
information. This income is not related to the trading of the
business in the period but is related to the disposal of the
logistics business in a prior year. As a result, it is treated as
specific item.
Foreign
exchange and derivative movement on Naves
liability
The foreign exchange gain and fair
value gain on the Naves-related liabilities and derivative of £0.3
million (2023: £0.3 million loss) is
included as a specific item as it relates to the acquisition of
Naves and is not related to trading.
The tax charge on specific items
included within other items was £nil (2023: £0.2 million).
The tax effect of income not taxable was £0.2 million.
2.3 Operating profit from
continuing operations
Operating profit represents the results from
operations before finance income and costs, share of profit/(loss)
in associate and taxation.
This is stated after
charging/(crediting):
|
Notes
|
2024
£'000
|
2023
£'000
|
Staff costs
|
2.4
|
109,557
|
110,166
|
Other staff costs - acquisition
related
|
2.4
|
3,239
|
1,470
|
Depreciation of property, plant
and equipment
|
3.5
|
3,127
|
2,823
|
Amortisation of computer software
intangible assets
|
3.2
|
229
|
192
|
Bad debt charge
|
4.2
|
697
|
238
|
Auditor's remuneration
|
2.6
|
1,794
|
1,354
|
Other professional
costs
|
|
5,627
|
3,410
|
Office costs
|
|
2,145
|
1,595
|
IT and communication
costs
|
|
4,175
|
3,264
|
Insurance
|
|
1,083
|
1,069
|
Net foreign exchange
losses/(gains)
|
|
1,118
|
(1,465)
|
|
|
|
|
2.4 Staff costs
a) Staff costs for the
Group during the year (including directors)
|
Note
|
2024
£'000
|
2023
£'000
|
Salaries, wages and short-term
employee benefits
|
|
97,441
|
100,039
|
Other staff costs - acquisition
related1
|
2.2
|
3,239
|
1,470
|
Other pension costs
|
5.1
|
2,247
|
1,811
|
Social security costs
|
|
3,427
|
3,796
|
Share-based payments
|
6.3
|
6,442
|
4,520
|
Total
|
|
112,796
|
111,636
|
1 The
acquisition related staff costs relate to upfront cash payments
made in connection with the acquisition of Southport Maritime Inc.
and the upfront payments made on the acquisition of Madrid Shipping
Advisors SL, which are both treated as a remuneration expense. For
further details on the upfront payments, see Note
2.2.The numbers above include remuneration and pension
entitlements for each director.
b) Average number of
employees
|
2024
number
|
2023
number
|
Chartering
|
266
|
253
|
Risk Advisory
|
31
|
32
|
Investment Advisory
|
49
|
63
|
Central
|
63
|
36
|
Total
|
409
|
384
|
c) Key management
compensation
The remuneration of key management, which the
Group considers to be the directors, is set out below.
|
2024
£'000
|
2023
£'000
|
Salaries, short-term employee
benefits and fees
|
4,954
|
5,879
|
Other pension costs
|
85
|
52
|
Termination benefits
|
131
|
-
|
Share-based payments
|
548
|
1,226
|
Total
|
5,718
|
7,157
|
Pension costs relate to contributions made to a
defined contribution pension scheme on behalf of four (2023: three)
members of key management.
2.5 Finance income and costs
The tables below provide a breakdown of the key
components of finance income and finance costs.
|
Note
|
2024
£'000
|
2023
£'000
|
Finance income:
|
|
|
|
- Interest on bank
deposits
|
4.5
|
464
|
84
|
- Interest on lease
receivables
|
3.6
|
16
|
35
|
- Interest income on the net defined benefit
asset
|
5.1
|
85
|
-
|
- Gain on derivative instruments not eligible for
hedge accounting
|
4.4
|
273
|
-
|
- Foreign exchange gain on non-GBP
denominated credit facilities
|
4.6
|
33
|
-
|
- Gain on Naves related derivative instruments and
liability
|
4.7
|
333
|
-
|
- Interest on of Cory earnout
deferred consideration receivable
|
4.4
|
86
|
83
|
Total finance income
|
|
1,290
|
202
|
|
|
|
|
Finance costs:
|
|
|
|
- Interest payable on revolving
credit and overdraft facilities
|
4.6
|
(2,407)
|
(1,151)
|
- Interest payable on defined
benefit liability
|
5.1
|
-
|
(54)
|
- Loss on derivative instruments
not eligible for hedge accounting
|
4.4
|
-
|
(292)
|
- Foreign exchange loss on non-GBP
denominated credit facilities
|
4.6
|
-
|
(49)
|
- Loss on Naves related
derivative instruments and foreign exchange loss on liability
|
4.7
|
-
|
(250)
|
- Interest payable on convertible
loan notes
|
4.7
|
(227)
|
(426)
|
Subtotal finance costs before
interest on lease liabilities
|
|
(2,634)
|
(2,222)
|
- Interest on lease
liabilities
|
3.6
|
(189)
|
(175)
|
Total finance costs
|
|
(2,823)
|
(2,397)
|
Finance costs - net
|
|
(1,533)
|
(2,195)
|
2.6 Auditor's remuneration
A more detailed analysis of the auditor's
services is provided below:
|
2024
£'000
|
2023
£'000
|
Audit services:
|
|
|
- Fees payable to the Company's
auditor for the audit of the Company's Financial
Statements
|
625
|
740
|
Fees payable to the Group's
auditor and its associates for other services:
|
|
|
- The audit of the Group's
subsidiaries pursuant to legislation
|
1,029
|
457
|
- Other services - interim review
and reporting accountant services
|
140
|
157
|
|
1,794
|
1,354
|
All fees paid to the auditor were charged to
operating profit in both years. Included in the FY24 audit fees
disclosed above is an amount of £0.4 million in relation to
incremental audit cost related to the investigation work
undertaken. See Note 2.2 for further detail.
2.7 Taxation
The taxation expense represents the sum of the
current and deferred tax.
Tax currently payable is based on taxable
profit for the year. Taxable profit differs from profit as reported
in the Income Statement because it excludes items of income and
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group and Company's liability for current tax is calculated using
rates that have been enacted or substantively enacted by the
Balance Sheet date.
Deferred income tax is provided in full, using
the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in
the consolidated Financial Statements. However, deferred tax
liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not accounted
for if it arises from the initial recognition of an asset or
liability in a transaction other than a business combination that,
at the time of the transaction, affects neither accounting nor
taxable profit or loss and does not give rise to equal taxable and
deductible temporary differences. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantively
enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised, or
the deferred income tax liability is settled. Deferred tax assets
and liabilities are offset where there is a legally enforceable
right to offset current tax assets and liabilities and where the
deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity
has a legally enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Current and deferred tax are recognised in the
Income Statement, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In
this case, the tax is also recognised in other comprehensive income
or directly in equity, respectively.
a) Analysis of charge in year
|
2024
£'000
|
2023
£'000
|
Current tax
|
|
|
UK corporation tax charged to the
Income Statement
|
1,015
|
1,194
|
UK adjustment in respect of
previous years
|
(340)
|
-
|
Overseas tax on profits in the
year
|
2,668
|
4,559
|
Overseas adjustment in respect of
previous years
|
(425)
|
394
|
Total current tax
|
2,918
|
6,147
|
Deferred tax
|
|
|
UK current year origination and
reversal of temporary differences
|
(97)
|
(190)
|
Due to change in rate of
tax
|
(2)
|
-
|
UK adjustment in respect of
previous years
|
(28)
|
(242)
|
Overseas current year origination
and reversal of temporary differences
|
110
|
(712)
|
Overseas adjustment in respect of
previous years
|
(2)
|
(148)
|
Total deferred tax
|
(19)
|
(1,292)
|
Taxation
|
2,899
|
4,855
|
Reconciliation between expected and actual tax
charge
|
2024
£'000
|
2023
£'000
|
Profit before tax from continuing
operations
|
7,523
|
9,451
|
Profit before tax at standard rate
of UK corporation tax of 24.49% (2023: 19%)
|
1,842
|
1,796
|
Utilisation of deferred tax asset
at lower effective tax rate
|
(2)
|
22
|
Net expenses not deductible for
tax purposes
|
1,827
|
1,580
|
Utilisation of previously
unrecognised losses
|
(36)
|
(104)
|
Tax on overseas branch
|
115
|
672
|
Tax calculated at domestic rates
applicable to profits in overseas subsidiaries
|
(565)
|
758
|
Other differences leading to a
decrease in tax
|
-
|
(365)
|
Share scheme movements
|
446
|
316
|
Unrecognised deferred tax on
losses2
|
67
|
176
|
Prior year
adjustments1
|
(795)
|
4
|
Total tax charge for the
year
|
2,899
|
4,855
|
1Included within the prior year adjustment, a £0.5 million
credit arose in the UK as a result of a foreign tax credit claim.
In addition, in the prior year, as part of the Group's estimate in
relation to uncertain tax positions, the Group had applied a tax
rate of 17% in Singapore, but after meeting the qualifying criteria
a rate of 10.5% is applicable which has resulted in a credit of
£0.4 million in the current year.
2 The Group has £0.2 million of unrecognised deferred tax asset
relating to £0.8 million of losses. The expiry date of operating
losses carried forward is dependent upon the law of the various
territories in which losses arise. As at 29 February 2024 the
losses have no expiry. The prior year amount was incorrectly
reported as a decrease of £0.2m but has been updated in the current
year with the offsetting movement included in other differences
leading to a decrease in tax.
Included within the total tax charge is £0.8
million credit (2023: £0.2 million) in respect of specific items
disclosed separately on the face of the Income Statement. See Note
2.2.
The Group's future tax charge will be sensitive
to the geographic mix of profits earned, the tax rates in force and
changes to the tax rules in jurisdictions that the Group operates
in. The UK main rate increased to 25% from 1 April 2023. The impact
of UK rate changes on deferred tax were taken into account in the
prior year.
b) Amounts recognised in OCI
|
2024
£'000
|
2023
£'000
|
Items that will not be reclassified to profit or
loss
|
|
|
Actuarial gain in respect of
defined benefit pension scheme
|
173
|
2,775
|
Deferred tax charge on defined
benefit pension scheme
|
-
|
(414)
|
Sub-total
|
173
|
2,361
|
|
|
|
Items that will be reclassified to profit or
loss
|
|
|
Cash flow hedge
|
1,641
|
388
|
Deferred tax charge on cash flow
hedge
|
(410)
|
(97)
|
Sub-total
|
1,231
|
291
|
|
|
|
Total tax recognised in
OCI
|
(410)
|
(511)
|
Total amounts recognised in
OCI
|
1,404
|
2,652
|
Within the UK current year
origination and reversal of temporary differences there is no
amount (2023: £414,000 debit) in respect of deferred tax on
the actuarial gain on the Group's defined benefit pension
scheme.
c) Deferred tax asset
Deferred Tax Asset
|
|
|
|
|
|
|
Accelerated capital
allowances
|
Trading
losses
|
Bonuses
|
Other
provisions
|
Employee
benefits
|
Total
|
At 1 March 2022
|
(48)
|
248
|
713
|
913
|
1,887
|
3,713
|
(Charge)/credit to Income
Statement
|
48
|
(248)
|
710
|
219
|
-
|
729
|
Charge to Other Comprehensive
Income
|
-
|
-
|
-
|
(511)
|
-
|
(511)
|
Credit to equity
|
-
|
-
|
-
|
-
|
863
|
863
|
At 28 February 2023
|
-
|
-
|
1,423
|
621
|
2,750
|
4,794
|
(Charge)/credit to Income
Statement
|
86
|
215
|
(502)
|
(116)
|
-
|
(317)
|
Charge to Other Comprehensive
Income
|
-
|
-
|
-
|
(410)
|
-
|
(410)
|
Charge to equity
|
-
|
-
|
-
|
-
|
(1,047)
|
(1,047)
|
|
Exchange translation
differences
|
-
|
-
|
(66)
|
25
|
-
|
(41)
|
At 29 February 2024
|
86
|
215
|
855
|
120
|
1,703
|
2,979
|
The movement in the net deferred tax asset
|
2024
£'000
|
2023
£'000
|
Balance at beginning of
year
|
4,450
|
3,713
|
|
|
|
Movement to Income
Statement:
|
|
|
Adjustments in respect of prior
years
|
30
|
390
|
Arising on pension
costs
|
-
|
99
|
Arising on bonuses
|
(502)
|
632
|
Arising on other
|
491
|
170
|
Total movement to Income
Statement
|
19
|
1,291
|
Balance arising on business
combinations
|
-
|
(906)
|
Movement to other comprehensive
income:
|
|
|
Related deferred tax
asset
|
(410)
|
(511)
|
Exchange translation
differences
|
(41)
|
-
|
Movement to equity
|
(1,047)
|
863
|
Total movement to equity and other
comprehensive income
|
(1,498)
|
352
|
|
|
|
Balance at end of year
|
2,971
|
4,450
|
A deferred tax asset of
£2.9 million (2023: £4.8
million) has been recognised as the
directors believe that it is probable that there will be sufficient
taxable profits in the future to recover the asset in
full.
d) Deferred tax liability
Analysis of the deferred tax liabilities
|
As at
29 Feb
2024
£'000
|
As
at
28 Feb
2023
£'000
|
Temporary differences
|
(8)
|
(344)
|
Balance at end of year
|
(8)
|
(344)
|
The movement in the deferred tax liability
|
As at
29 Feb
2024
£'000
|
As
at
28 Feb
2023
£'000
|
Balance at beginning of
year
|
(344)
|
-
|
Balance arising on business
combinations
|
-
|
(906)
|
Current year origination and
reversal of temporary differences
|
336
|
562
|
Balance at end of year
|
(8)
|
(344)
|
No deferred tax has been provided in respect of
temporary differences associated with investments in subsidiaries
and interests in joint ventures where the Group is in a position to
control the timing of the reversal of the temporary differences and
it is probable that such differences will not reverse in the
foreseeable future. The aggregate amount
of temporary differences associated with investments in
subsidiaries, for which a deferred tax liability has not been
recognised, is approximately £nil (2023: £nil).
2.8 Earnings per share
Basic earnings per share is calculated by
dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the
year, excluding ordinary shares held by
the Employee Share Ownership Plan and ordinary shares held by the
ACM Employee Benefit Trust which are not treated as
outstanding.
For diluted earnings per share, the
weighted average number of ordinary shares in issue is adjusted to
assume conversion of all dilutive potential ordinary shares. The
Group has dilutive ordinary shares, being those options granted to
employees where the expected consideration is less than the average
market price of the Company's ordinary shares during the period
that they are outstanding, and convertible loan notes issued in
respect of the acquisition of Naves.
Total operations
|
2024
£'000
|
2023
£'000
|
Profit for the year attributable
to shareholders
|
4,624
|
4,596
|
|
|
|
|
Pence
|
pence
|
Basic earnings per
share
|
15.65
|
15.85
|
Effect of dilutive share
options
|
(2.85)
|
(2.60)
|
Diluted earnings per
share
|
12.80
|
13.25
|
|
|
|
Underlying operations
|
2024
£'000
|
2023
£'000
|
Underlying profit for the year
attributable to shareholders
|
10,820
|
13,399
|
|
pence
|
pence
|
Basic earnings per
share
|
36.62
|
46.22
|
Effect of dilutive share
options
|
(6.66)
|
(7.70)
|
Diluted earnings per
share
|
29.96
|
38.52
|
|
|
|
A reconciliation by class of instrument in
relation to potential dilutive ordinary shares and their impact on
earnings is set out below:
|
2024
|
|
2023
|
|
Weighted
average number of shares
|
Underlying earnings
£'000
|
Statutory earnings
£'000
|
|
Weighted
average number of shares
|
Underlying earnings
£'000
|
Statutory earnings
£'000
|
|
|
|
|
|
|
|
|
Used in basic earnings per
share
|
29,547,810
|
10,820
|
4,624
|
|
28,990,885
|
13,399
|
4,596
|
RSP, DBP and LTIP
|
6,565,016
|
-
|
-
|
|
5,428,815
|
-
|
-
|
Options (SAYE)
|
-
|
-
|
-
|
|
216,764
|
-
|
-
|
Convertible loan notes
|
-
|
-
|
-
|
|
201,118
|
20
|
20
|
Used in diluted earnings per share
|
36,112,826
|
10,820
|
4,624
|
|
34,837,582
|
13,419
|
4,616
|
3 Balance sheet non-current assets
3.1 Goodwill
Business combinations are accounted for using
the acquisition method. The goodwill recognised as an asset by the
Group is stated at cost less any accumulated impairment
losses.
On the acquisition of a business, fair values
are attributed to the net assets (including any identifiable
intangible assets) acquired. The excess of the consideration
transferred, any non-controlling interest recognised and the fair
value of any previous equity interest in the acquired entity over
the fair value of net identifiable assets acquired is recorded as
goodwill. Acquisition-related costs are recognised in the Income
Statement as incurred in accordance with IFRS 3.
In relation to acquisitions where the fair
value of assets acquired exceeds the fair value of the
consideration, the excess fair value is recognised immediately in
the Income Statement as a gain on purchase.
On the disposal of a business, goodwill
relating to that business remaining on the Balance Sheet is
included in the determination of the profit or loss on disposal. As
permitted by IFRS 1, goodwill on acquisitions arising prior
to 1 March 2004 has been retained at prior amounts and is
tested annually for impairment.
Key
estimate
Impairment of goodwill
Goodwill is tested for impairment on an annual
basis, and the Group will also test for impairment at other times
if there is an indication that an impairment may exist.
Determining whether goodwill is impaired requires an estimation of
the value-in-use of the cash-generating units to which these assets
have been allocated. The value-in-use calculation estimates
the present value of future cash flows expected to arise for the
cash-generating units. The key estimates are therefore the
selection of suitable discount rates and the estimation of future
growth rates which vary between cash-generating units depending on
the specific risks and the anticipated economic and market
conditions related to each cash-generating unit.
As part of determining the value in use of each
CGU group, Management has considered the potential impact of
climate change on the business performance over the next five
years, and the terminal growth rates. While there is considerable
uncertainty relating to the longer term and quantifying the impact
on a range of outcomes, management considers that
environmental-related incremental costs are expected to have a
relatively low impact. Recognising that there are extreme but
unlikely scenarios, the Group considers that while exposed to
physical risks associated with climate change (such as flooding,
heatwaves, sea level rises and increased precipitation) the
estimated impact of these on the Group is not deemed material. In
addition, the Group is exposed to transitional risks which might
arise, for example, from government policy, customer expectations,
material costs and increased stakeholder concern. The transitional
risks could result in financial impacts such as higher
environmentally focused levies (e.g. carbon pricing). While the
Group is exposed to the potential financial impacts associated with
transitional risks, based on information currently available, these
are not deemed to have a significant impact.
The key assumptions and the sensitivity of them
to the carrying values are provided in the note below.
|
|
£'000
|
Cost
|
|
At 28 February 2022
|
87,550
|
Exchange adjustments
|
566
|
At 28 February 2023
|
88,116
|
Exchange adjustments
|
(300)
|
At 29 February 2024
|
87,816
|
Accumulated impairment
|
|
At 28 February 2022
|
7,659
|
Impairment charge recognised in
the year
|
9,050
|
At 28 February 2023
|
16,709
|
Exchange adjustments
|
(230)
|
At 29 February 2024
|
16,479
|
|
|
Net book value at 29 February 2024
|
71,337
|
Net book value at 28 February
2023
|
71,407
|
All goodwill is allocated to cash-generating
units. The allocation of goodwill to groups of cash-generating
units is as follows:
|
2024
£'000
|
2023
£'000
|
Chartering
|
68,696
|
68,696
|
Corporate Finance (part of
Investment Advisory segment)
|
2,641
|
2,711
|
|
71,337
|
71,407
|
These groups of cash-generating units represent
the lowest level within the Group at which goodwill is monitored
for internal management purposes.
All goodwill is denominated in the Group's
reporting currency, with the exception of the Corporate Finance Division which is denominated in
euros. Goodwill denominated in foreign currencies is revalued at
the Balance Sheet date. The exchange adjustment at 29 February 2024
was a loss of £0.1 million (2023: gain of £0.6
million).
The Group is required to test, on an annual
basis, whether goodwill has suffered any impairment. The
recoverable amount is determined based on value-in-use
calculations. The use of this method requires the estimation of
future cash flows and the determination of a discount rate in order
to calculate the present value of the cash flows.
The key assumptions on which the value-in-use
calculations are based relate to (i) business performance over the
next five years, (ii) long-term growth rates beyond 2029 and (iii)
discount rates applied.
i)
Business performance over the next five years - The estimated cash
flows were based on the approved annual budget for the next
financial year and projections for the following four years which
are based on management's estimates of revenue growth and cost
inflation which reflect past experience and management's
expectation of future events given the specific risks and economic
and market conditions of each cash-generating unit. The assumptions
behind these projections are consistent with the viability
statement. Cash flows have been used over a period of five years as
management believes this reflects a reasonable time horizon for
management to monitor the trends in the business.
ii)
Long-term growth rates - This is the average growth rate used to
extrapolate cash flows beyond the budget period.
iii)
Discount rates - The post-tax discount rate was determined based on
a weighted average cost of capital ("WACC") and adjusted for
CGU-specific risk factors specific to the CGU group.
The results of the impairment tests are as
follows:
a)
Chartering
The key assumptions and resulting net present
values are as follows:
Chartering
|
2024
|
2023
|
Post-tax discount rate
|
11.86%
|
13.04%
|
Equivalent pre-tax discount rate
|
12.40%
|
16.47%
|
Average revenue growth rate years
2-51
|
3.0%
|
3.5%
|
Operating profit margin years 1-5
|
13.8% -
14.4%
|
15.0 -
15.4%
|
Long-term growth rate
|
1.7%
|
1.7%
|
1 No year-on-year revenue growth is assumed in year
1
At 29 February 2024, the net present value of
the Chartering segment is significantly higher than the carrying
value of the goodwill in respect of this cash-generating unit. At
the Balance Sheet date, management concluded that there were no
reasonably possible changes in the key assumptions used in the
impairment review that would reduce headroom to £nil or result in
an impairment.
b) Corporate
Finance
Revenues for the Corporate Finance Division are
challenging to forecast because of the highly variable nature of
success fees. Management forecasts over the five year
forecast period consider recent performance and reflect
management's best estimate of success fee taken into account of
volatility of the success fee. Growth rates used in the
value-in-use test reflect this variability and were based on the
best estimate of the Management.
Corporate
Finance
|
2024
|
2023
|
Post-tax discount rate
|
13.84%
|
14.82%
|
Equivalent pre-tax discount rate
|
14.45%
|
20.66%
|
Average revenue growth rate years
2-51
|
5.0%
|
5.0%
|
Operating profit margin years 1-5
|
12.3% -
15.9%
|
11.6% -
14.4%
|
Long-term growth rate
|
1.7%
|
1.7%
|
1 Year-on-year growth in year 1 is 29%, which reflects recovery
of revenue after lower than historically achieved performance in
FY24
Sensitivity to impairment for Corporate
Finance
To test the sensitivity of the results of the
impairment review, the calculations have been re-performed, flexing
the three key assumptions:
- revenue growth
rate from year two to five;
- post-tax
discount rate; and
- revenue
outperforms or underperforms forecast in year 1 with subsequent
revenue growth in line with the above assumptions in years two to
five.
The recoverable amount of the Group's goodwill
relating to Corporate Finance exceeds its carrying value by £0.6
million. The below table presents the net variance in the
calculated value in use of Corporate Finance under each
scenario:
|
|
|
Change in revenue
growth
|
Change in post-tax discount
rate
|
Year 1 revenue outperforms
or underperforms forecast
|
|
|
|
+1%
|
-1%
|
+2%
|
-2%
|
+15%
|
-15%
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Corporate
Finance
|
|
|
318
|
(310)
|
(456)
|
637
|
1,438
|
(1,438)
|
Further, the break-even points of the
impairment review which would result in an impairment when flexing
these three key assumptions are as below:
|
|
Change in
assumption Increase/(decrease)
|
Revenue growth rate from year 2 to
5
|
|
(1.8%)
|
Post-tax discount rate
|
|
2.5%
|
Revenue underperforms forecast in year
1
|
|
(5.8%)
|
The effect on cash flows of climate change was
considered but assessed to have no material impact at this time.
Management does not believe that climate-related risks nor the
potential impact of climate change on the Group's operations would
materially affect the recoverability of goodwill in either of the
cash-generating units (see Note 3.1).
3.2 Other intangible assets
Computer software
The Group capitalises computer software at
cost. It is amortised on a straight-line basis over its estimated
useful life of up to four years.
Other intangible assets
Intangible assets acquired as part of a
business combination are stated in the Balance Sheet at their fair
value at the date of acquisition less accumulated amortisation and
any provision for impairment. The amortisation of the carrying
value of the capitalised forward order book and customer
relationships is charged to the Income Statement over an estimated
useful life, which is between four months to twelve years. The
amortisation in respect of capitalised brand assets is expensed to
the Income Statement over an estimated useful life, which is
between three and twelve years.
|
|
Computer
software
£'000
|
Other
intangible
assets
£'000
|
Total
£'000
|
Cost
|
|
|
|
|
At 28 February 2022 (restated)[2]
|
|
5,586
|
1,040
|
6,626
|
Additions
|
|
90
|
-
|
90
|
Business combination
|
|
-
|
3,545
|
3,545
|
Disposals
|
|
(87)
|
-
|
(87)
|
Exchange rate
adjustments
|
|
5
|
33
|
38
|
At 28 February 2023
|
|
5,594
|
4,618
|
10,212
|
Additions
|
|
32
|
-
|
32
|
Disposals
|
|
-
|
(245)
|
(245)
|
Exchange rate
adjustments
|
|
(3)
|
(171)
|
(174)
|
At 29 February 2024
|
|
5,623
|
4,202
|
9,825
|
|
|
|
|
|
Amortisation
|
|
|
|
|
At 28 February 2022 (restated) 1
|
|
4,845
|
784
|
5,629
|
Charge for the year
|
|
192
|
349
|
541
|
Impairment
|
|
60
|
-
|
60
|
Exchange adjustments
|
|
1
|
1
|
2
|
At 28 February 2023
|
|
5,098
|
1,134
|
6,232
|
Charge for the year
|
|
229
|
449
|
678
|
Impairment
|
|
-
|
-
|
-
|
Disposal
|
|
-
|
(245)
|
(245)
|
Exchange adjustments
|
|
(1)
|
(24)
|
(25)
|
At 29 February 2024
|
|
5,326
|
1,314
|
6,640
|
|
|
|
|
|
Net book value at 29 February 2024
|
|
297
|
2,888
|
3,185
|
|
|
|
|
|
Net book value at 28 February
2023
|
|
496
|
3,484
|
3,980
|
1 The gross cost
and gross accumulated amortisation of other intangible assets at 28
February 2022 included fully amortised acquired order books
relating to historical business combinations. The Group believes
that once all orders in the order book have been satisfied and
revenue recognised,, there is no further asset to benefit from. For
order books satisfied at 28 February 2022 the Group has restated
the opening gross cost and gross accumulated amortisation to
correct the opening gross positions in relation to other intangible
assets. The impact of the restatement is a reduction of £8.5
million to the gross cost and gross accumulated amortisation at 28
February 2022, with no impact to net book values or amortisation
expense in the current or prior year.
Other intangible assets brought forward from
the prior year relate to forward books of income acquired in
acquisitions which are amortised over the period that the income is
recognised; customer relationships which are amortised over
a period of up to twelve years; and brand which is amortised
over a period of up to ten years.
The addition of £3.5 million in the prior year
related to the acquisition of Southport, which gave rise to
customer-related intangible assets of £3.1 million (including
customer relationships of £2.8 million and order backlog of £0.3
million) and an asset of £0.4 million in relation to the trade
name. The amortisation period for customer relationships is twelve
years, order backlog is four months, and trade name is five
years.
The customer relationships and order backlog
were valued using an excess earnings method. Under the excess
earnings method, a stream of revenue and expenses are identified as
those associated with a particular group of assets. This group of
assets includes the subject intangible asset as well as other
assets (contributory assets) that are necessary to support the
earnings associated with the subject intangible asset. By
identifying and subtracting contributory assets, the residual
earnings are estimated to be attributable to the subject intangible
asset and are discounted to present value at an appropriate
discount rate (estimated at 19%). The trade name was valued using a
royalty savings method. The royalty savings method is a derivation
of the income approach often used to value intangible property that
may be licensed to third parties. Under this method, it is assumed
that a company, without a similar asset, would license the right to
use this intangible asset and pay a royalty related to turnover
achieved. The value of the asset is established by calculating the
present value of the royalty stream (estimated at 4%) that the
business is saving by owning the asset.
At 29 February 2024, the Group had no
contractual commitments for the acquisition of computer software or
other intangible assets (2023: £nil).
3.3 Investments
In accordance with IFRS 9, the Group's
investments in unlisted equity investments are measured at fair
value through profit or loss as the Group has not elected to
recognise fair value gains and losses through other comprehensive
income.
|
2024
£'000
|
2023
£'000
|
Unlisted investments
|
1,633
|
1,780
|
Movement in unlisted
investments
|
|
£'000
|
£'000
|
Opening balance
|
|
1,780
|
1,780
|
Fair value loss
|
|
(147)
|
-
|
Closing balance
|
|
1,633
|
1,780
|
A list of subsidiary undertakings is included
in Note 7.3.
The Financial Statements of the principal
subsidiary undertakings are prepared to 29 February
2024.
The Group's unlisted investments
include 1,000 (2023: 1,000) ordinary £1 shares in London Tanker's
Broker Panel Limited. The investment is carried at fair value of
£1.6 million, see Note 4.4 for further
details.
3.4 Investment in associate
Investments
Investments in associates and joint ventures
where the Group has joint control or significant influence are
accounted for under the equity method. Investments in associates
are initially recognised in the Consolidated Balance Sheet at cost.
Subsequently, associates are accounted for under the equity method,
where the Group's share of post-acquisition profits and losses and
other comprehensive income is recognised in the Income Statement
and Statement of Comprehensive Income.
Profits and losses arising on transactions
between the Group and its associates are recognised only to the
extent of unrelated investors' interests in the associate. The
investor's share in the associate's profits and losses arising from
these transactions is eliminated against the carrying value of the
associate.
Where the Group's share of the associate's
identifiable net assets is greater than the cost of investment, a
gain on purchase is recognised in the Income Statement and the
carrying value of the investment in the Consolidated Balance Sheet
is increased.
When the Group disposes of shares in associates
or joint ventures, the Group recognises a profit or loss on
disposal based on the net proceeds less the weighted average cost
of the shares disposed of. On disposal, the Group reclassifies
foreign exchange amounts previously recognised in other
comprehensive income relating to that reduction in ownership
interest if that gain or loss would be required to be reclassified
to profit or loss on the disposal of the related assets or
liabilities.
The most recent Financial Statements of an
associate are used for accounting purposes unless it is impractical
to do so. Where the Group and an associate have non-coterminous
reporting dates, the associate's full-year accounts will be used
for the purposes of the Group's reporting at
29 February with adjustments made for any significant
transactions or events.
Investments where the Group has no significant
influence are held at fair value, with movements in fair value
recorded in profit and loss.
Zuma Labs Limited
Zuma Labs Limited is a private company
incorporated in England and Wales and its registered address is
Kemp House, 128 City Road, London, United Kingdom, EC1V 2NX. Zuma
Labs Limited has one share class and each share carries one
vote.
At 29 February 2024, the Group's shareholding
was 2,500 shares, which equates to 20.0% of Zuma Labs Limited's
share capital and 20.0% of voting rights (2023: 2,500 shares, 20%
of share capital and 20% of voting rights). The Group has
representation on the board of Zuma Labs Limited, and, as a result,
the Group considers that it has the power to exercise significant
influence in Zuma Labs Limited and the investment in it has been
accounted for using the equity method.
A purchase price allocation exercise was
undertaken to measure the fair value of the net assets on the date
at which Zuma Labs Limited became an associate, and also at each
date at which further shares were subscribed for. Based on the
purchase price allocation exercise, the difference between the cost
of the investment and the Group's share of the net fair value of
Zuma Labs Limited's identifiable assets and liabilities is
accounted for as goodwill. Amortisation of that goodwill is not
permitted.
IAS 28 requires the most recent financial
statements of an associate are used for accounting purposes, and
that coterminous information should be used unless it is
impractical to do so. Zuma Labs Limited has a year-end of 31 March
and accounts up to 31 December 2023 have been made available, so
for practical reasons Zuma Labs Limited's management accounts for
the nine months ended 31 December 2023 will be used for the
purposes of the Group's full-year reporting at 29 February with
adjustments made for any significant transactions and events.
Zuma Labs Limited will prepare its next set of Financial Statements
for the year ended 31 March 2024. At 29 February
2024 Zuma Labs Limited had no contingent liabilities.
Management has reviewed the carrying value of
the investment in Zuma Labs Limited at 29 February 2024 and does
not consider this to be impaired.
The movements in the investment in associates
are provided below.
|
Zuma
£'000
|
At 28 February 2022
|
724
|
Share of loss in
associate
|
(23)
|
At 28 February 2023
|
701
|
Share of profit in
associate
|
12
|
At 29 February 2024
|
713
|
3.5 Property, plant and
equipment
Property, plant and equipment are shown at
historical cost less accumulated depreciation and any provision for
impairment.
Depreciation is provided at rates calculated to
write off the cost, less estimated residual value of each asset, on
a straight-line basis over its expected useful life as follows
(except for long and short leasehold interests which are written
off against the remaining period of the lease):
Computer
equipment
- four years
Fixtures and
equipment - four
years
|
|
Land and
buildings
£'000
|
Computers
£'000
|
Fixtures
and
equipment
£'000
|
Total
£'000
|
Cost
|
|
|
|
|
|
At 28 February 2022
|
|
14,407
|
1,599
|
1,878
|
17,884
|
Additions at cost
|
|
757
|
374
|
334
|
1,465
|
Business combination
|
|
86
|
-
|
80
|
166
|
Disposals
|
|
(2,445)
|
(4)
|
(369)
|
(2,818)
|
Exchange differences
|
|
427
|
41
|
88
|
556
|
At 28 February 2023
|
|
13,232
|
2,010
|
2,011
|
17,253
|
Additions at cost
|
|
3,052
|
240
|
281
|
3,573
|
Disposals
|
|
(3)
|
(101)
|
(45)
|
(149)
|
Exchange differences
|
|
(279)
|
(28)
|
(55)
|
(362)
|
At 29 February 2024
|
|
16,002
|
2,121
|
2,192
|
20,315
|
|
|
|
|
|
|
Accumulated
depreciation
|
|
|
|
|
|
At 28 February 2022
|
|
8,199
|
1,061
|
1,546
|
10,806
|
Charge for the year
|
|
2,477
|
171
|
175
|
2,823
|
Disposals
|
|
(1,852)
|
(1)
|
(313)
|
(2,166)
|
Impairment
|
|
-
|
150
|
-
|
150
|
Exchange differences
|
|
234
|
25
|
61
|
320
|
At 28 February 2023
|
|
9,058
|
1,406
|
1,469
|
11,933
|
Charge for the year
|
|
2,662
|
246
|
219
|
3,127
|
Reclassification
|
|
(6)
|
-
|
6
|
-
|
Disposals
|
|
(3)
|
(91)
|
(45)
|
(139)
|
Exchange differences
|
|
(126)
|
(21)
|
(41)
|
(188)
|
At 29 February 2024
|
|
11,585
|
1,540
|
1,608
|
14,733
|
|
|
|
|
|
|
Net book value at 29 February 2024
|
|
4,417
|
581
|
584
|
5,582
|
|
|
|
|
|
|
Net book value at 28 February
2023
|
|
4,174
|
604
|
542
|
5,320
|
At 29 February 2024, the Group had no
contractual commitments for the acquisition of property, plant and
equipment (2023: £nil).
3.6 Leases
The Group as a lessee
The Group has various lease arrangements for
properties, and other equipment. At inception of a lease
contract, the Group assesses whether the contract conveys the right
to control the use of an identified asset for a certain period of
time and whether it obtains substantially all the economic benefits
from the use of that asset, in exchange for consideration. The
Group recognises a lease liability and a corresponding right-of-use
asset with respect to all lease arrangements in which it is a
lessee, except low-value leases and short-term leases of twelve
months or less, costs for which are recognised as an operating
expense within the Income Statement on a straight-line
basis.
A right-of-use asset is capitalised on the
Balance Sheet at cost, comprising the amount of the initial
measurement of the lease liability and lease payments made at or
before the commencement date, plus any initial direct costs
incurred in addition to an estimate of costs to remove or restore
the underlying asset. Where a lease incentive is receivable, the
amount is offset against the right-of-use asset at inception.
Right-of-use assets are depreciated using the straight-line method
over the shorter of the estimated life of the asset or the lease
term.
The lease liability is initially measured at
the present value of future lease payments. Interest expense is
charged to the Consolidated Income Statement over the lease period
so as to produce a constant periodic rate of interest on the
remaining balance of the liability. The lease payments are
discounted using the interest rate implicit in the lease. If that
rate cannot be determined, the lessee's incremental borrowing rate
is used, being the rate that the lessee would have to pay to borrow
the funds necessary to obtain an asset of similar value in a
similar economic environment with similar terms and conditions.
Generally, the interest rate implicit in the lease is not readily
determinable, as such the incremental borrowing rate is used to
discount future lease payments.
For the Group, lease payments generally
comprise the following:
− Fixed payments, less any lease incentives
receivable;
− Variable payments that are based on an index
or rate; and
− Payments to be made under extension options
which are reasonably certain to be exercised.
Lease payments made are apportioned between an
interest charge and a capital repayment amount which are disclosed
within the financing activities and the operating activities
sections of the Consolidated Statement of Cash Flows respectively.
When an adjustment to lease payments based on an index takes
effect, the liability is remeasured with a corresponding adjustment
to the right-of-use asset.
Contracts entered into by the Group have a wide
range of terms and conditions but generally do not impose any
additional covenants. Several of the Group's contracts include
indexation adjustments to lease payments in future periods which
are not reflected in the measurement of the lease liabilities at 29
February 2024. Many of the contracts entered into by the Group
include extension or termination options which provide the Group
with additional operational flexibility. If the Group considers it
reasonably certain that an extension option will be exercised or a
termination option not exercised, the additional period is included
in the lease term.
A modification to a lease which changes the
lease payment amount (e.g. due to a renegotiation or market rent
review) or amends the term of the lease, results in a reassessment
of the lease liability with a corresponding adjustment to the
right-of-use asset.
The Group as
a lessor
The Group classifies leases as either operating
or finance leases based on the substance of the arrangement. At
commencement of a finance lease, a receivable is recognised at an
amount equal to the Group's net investment in the lease. Finance
income is recognised reflecting a constant periodic rate of return
on the net investment in the lease. Lease payments from operating
leases are recognised as income on a straight-line
basis.
Right-of-use assets
The Group leases a number of properties in the
jurisdictions from which it operates. In some jurisdictions it is
customary for lease contracts to provide for payments to increase
each year by inflation and in other property leases the periodic
rent is fixed over the lease term. The Group also leases certain
items of plant and equipment which are typically motor
vehicles. These contracts normally comprise only fixed
payments over the lease term.
|
|
Land and
buildings
£'000
|
Fixtures
and
equipment
£'000
|
Total
£'000
|
At 28 February 2022
|
|
5,182
|
12
|
5,194
|
Additions
|
|
711
|
59
|
770
|
Business combination
|
|
86
|
-
|
86
|
Depreciation
|
|
(2,079)
|
(8)
|
(2,087)
|
Disposals
|
|
(481)
|
(10)
|
(491)
|
Exchange differences
|
|
166
|
1
|
167
|
At 28 February 2023
|
|
3,585
|
54
|
3,639
|
Additions
|
|
2,898
|
172
|
3,070
|
Reclassification
|
|
6
|
(6)
|
-
|
Depreciation
|
|
(2,249)
|
(71)
|
(2,320)
|
Exchange differences
|
|
(145)
|
(1)
|
(146)
|
At 29 February 2024
|
|
4,095
|
148
|
4,243
|
Lease liabilities
|
|
|
Total
£'000
|
At 28 February 2022
|
|
|
8,506
|
Additions
|
|
|
770
|
Business combination
|
|
|
86
|
Disposal
|
|
|
(632)
|
Interest expense
|
|
|
175
|
Lease payments
|
|
|
(4,039)
|
Exchange differences
|
|
|
161
|
At 28 February 2023
|
|
|
5,027
|
Additions
|
|
|
3,021
|
Interest expense
|
|
|
189
|
Lease payments
|
|
|
(3,332)
|
Exchange differences
|
|
|
(127)
|
At 29 February 2024
|
|
|
4,778
|
In the prior year, right-of-use assets and
lease liabilities arising on business combinations represents
leases on property of £86,000. The total cash outflow for leases is
£3,332,000 (2023: £4,039,000), of which £189,000 (2023: £175,000)
represents payment of interest.
Lease receivables
|
Gross
£'000
|
Provision
£'000
|
Net
£'000
|
At 28 February 2022
|
1,512
|
(18)
|
1,494
|
Disposal
|
(39)
|
-
|
(39)
|
Interest income
|
35
|
-
|
35
|
Lease payments
|
(642)
|
-
|
(642)
|
Movement in provision
|
-
|
6
|
6
|
At 28 February 2023
|
866
|
(12)
|
854
|
Interest income
|
16
|
-
|
16
|
Lease payments
|
(642)
|
-
|
(642)
|
Movement in provision
|
-
|
12
|
12
|
At 29 February 2024
|
240
|
-
|
240
|
|
2024
£'000
|
2023
£'000
|
Short-term lease
expense
|
(222)
|
(217)
|
Short-term lease income
|
102
|
91
|
Lease liabilities
Contractual payments by maturity are provided
in Note 4.4 (f).
Lease receivables
Contractual receipts by maturity are provided
in the table below:
|
Within
1 year
£'000
|
1 to
2
Years
£'000
|
2 to
5
years
£'000
|
More
than
5 years
£'000
|
Total
£'000
|
Unearned
interest
£'000
|
Provision
£'000
|
Net
receivable
£'000
|
At 29 February 2024
|
241
|
-
|
-
|
-
|
241
|
(1)
|
-
|
240
|
At 28 February 2023
|
642
|
241
|
-
|
-
|
883
|
(17)
|
(12)
|
854
|
During the year, the financial effect of
revising lease terms arising from the effect of exercising
extension and termination options was an increase of £375,000
million (2023: increase of £98,000) in the recognised lease
liabilities. As at 29 February 2024, undiscounted potential future
cash outflows of £2.9 million (2023: £3.9 million) have not been
included in the lease liability because it is not reasonably
certain that the leases will be extended (or not
terminated).
4 Balance sheet - Operating assets and
liabilities
4.1 Other long-term
receivables
For the accounting policy and further details on
deferred and contingent consideration receivable, see Note 4.9. The
accounting policy for finance lease receivables is set out in Note
3.6.
|
|
|
2024
£'000
|
2023
£'000
|
Deferred consideration
|
|
|
1,304
|
2,540
|
Contingent
consideration
|
|
|
532
|
1,004
|
Security deposits
|
|
|
304
|
16
|
Finance lease
receivables
|
|
|
-
|
228
|
Prepayments
|
|
|
2,449
|
4,766
|
|
|
|
4,589
|
8,554
|
Deferred consideration of £1.3 million and
contingent consideration of £0.5 million relates to the earnout
payments receivable in respect of the disposal of Cory Brothers,
further detail is provided in Note 4.9. Prepayments includes
an asset of £2.4 million (2023: £4.8 million) which is the
non-current element of the clawback provision on joining incentives
paid to certain employees. The receivable is amortised over the
clawback period.
See Note 3.6 for a maturity analysis which
reconciles the long-term finance lease receivables to the
undiscounted lease receipts and unearned finance income.
4.2 Trade and other
receivables
Trade receivables and contract
assets
Trade receivables and contract assets are
initially recognised at fair value (less transaction costs) and
subsequently measured at amortised cost.
At the Balance Sheet date, there may be amounts
where invoices have not been raised but performance obligations
have been satisfied, and these are recognised as contract
assets.
Specific provision is made where there is
evidence that the balances will not be recovered in full. A
provision for expected credit losses is made for trade receivables
and contract assets using the simplified approach. A provision
matrix is used to calculate an expected credit loss as a
percentage of carrying value by age. The percentages are determined
based on historical credit loss experience as well as
forward-looking information. Expected credit loss provisions are
made for other receivables based on lifetime expected credit losses
using a model that considers forward-looking information and
significant increases in credit risk.
Trade and other receivables are non-interest
bearing and generally on terms payable within 30 to 90
days.
Other items
For the accounting policy and further details on
deferred and contingent consideration receivable, see Note 4.9. The
accounting policy for finance lease receivables is set out in Note
3.6.
Key
estimate
Provision for impairment of trade receivables
and contract assets
Trade receivables and contract assets are
amounts due from customers in the ordinary course of business.
Trade receivables and contract assets are classified as current
assets if collection is due within one year or less (or in the
normal operating cycle of the business if longer). If not, they are
presented as non-current assets.
The provision for impairment of trade
receivables and contract assets represents management's best
estimate at the Balance Sheet date. A number of judgements are made
in the calculation of the provision, primarily the age of the
invoice, the existence of any disputes, recent historical payment
patterns and the debtor's financial position.
When measuring expected credit losses, the
Group uses reasonable and supportable forward-looking information,
which is based on assumptions for the future movement of different
economic drivers and how these drivers will affect each other.
Probability of default constitutes a key input in measuring
expected credit losses. Probability of default is an estimate of
the likelihood of default over a given time horizon, the
calculation of which includes historical data, assumptions and
expectations of future market conditions. The expected loss rates
applied to receivables are provided in this note.
|
|
2024
£'000
|
2023
£'000
|
Trade receivables
|
26,964
|
31,989
|
Provision for impairment of trade
receivables
|
(2,837)
|
(3,725)
|
Net trade receivables
|
24,127
|
28,264
|
Deferred consideration
|
1,316
|
1,097
|
Contingent
consideration
|
550
|
403
|
Other receivables
|
3,949
|
4,148
|
Finance lease
receivables
|
240
|
626
|
Contract assets
|
1,517
|
3,388
|
Prepayments
|
6,031
|
5,397
|
Total
|
37,730
|
43,323
|
Deferred consideration of £1.3 million and
contingent consideration of £0.6 million relate to the earnout
payments receivable in respect of the disposal of Cory Brothers;
further detail is provided in Note 4.9.
Included in other receivables in both years are
VAT and other sales tax receivables and employee loans. In the
prior year, security deposits are also included.
Prepayments includes an asset of £3.5 million
(2023: £4.0 million) in respect of the current portion of the
clawback provision on joining incentives paid to certain employees
which are being charged to the Income Statement in accordance with
the clawback provisions of the underlying contracts. The receivable
is amortised over the clawback period.
The movement in the asset between years is due
to the invoicing of all prior year assets and the accrual of
amounts relating to the current year.
The total receivables balance is denominated
in the following currencies:
|
2024
£'000
|
2023
£'000
|
US dollars
|
28,690
|
35,888
|
Sterling
|
6,675
|
6,114
|
Other
|
2,365
|
1,321
|
Total
|
37,730
|
43,323
|
The directors consider that the carrying
amounts of trade receivables approximate to their fair
value.
Trade receivables are non-interest bearing and
are generally on terms payable within 30-90 days; terms associated
with the settlement of the Group's trade receivables vary across
the Group. Specific debts are provided for where recovery is deemed
uncertain, which will be assessed on a case-by-case basis whenever
debts are older than the due date, but always when debts are older
than usual for the industry in which each business in the Group
operates.
As at 29 February 2024, trade receivables of
£2,339,000 (2023: £3,003,000) which were over 12 months old were
treated as credit impaired and have been provided for. No provision
(2023: £nil) has been made for specific trade receivables which are
less than 12 months overdue.
The Group applies the IFRS 9 simplified
approach to measuring expected credit losses using a lifetime
expected credit loss provision for trade receivables and contract
assets. To measure expected credit losses on a collective basis,
trade receivables and contract assets are grouped based on similar
credit risk and ageing. The contract assets have similar risk
characteristics to the trade receivables for similar types of
contracts.
The expected loss rates are based on the Group's
historical credit losses and rates are then adjusted for current
and forward-looking information on macroeconomic factors affecting
the Group's customers. Trade receivables and
contract assets are written off where there is no reasonable
expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of a
debtor to engage in a repayment plan with the group, and a failure
to make contractual payments for a period of greater
than 365 days past due.
The ageing profile of trade receivables and
the lifetime expected credit loss for provisions and contract
assets is as follows:
2024
|
Trade
receivables
£'000
|
Expected loss
rate
%
|
Group
provision
£'000
|
ECL
provision
£'000
|
Total provision for
impairment
of trade
receivables
£'000
|
Up to 3 months
|
18,685
|
0.015
|
-
|
282
|
282
|
3 to 6 months
|
3,922
|
0.024
|
-
|
96
|
96
|
6 to 12 months
|
1,905
|
0.052
|
-
|
98
|
98
|
Over 12 months
|
2,452
|
0.954
|
2,286
|
53
|
2,339
|
Trade receivables
|
26,964
|
0.104
|
2,286
|
529
|
2,815
|
|
|
|
|
|
|
Contract assets
|
1,517
|
0.014
|
-
|
22
|
22
|
|
|
|
|
|
|
Total
|
28,481
|
0.100
|
2,286
|
551
|
2,837
|
2023
|
Trade
receivables
£'000
|
Expected loss
rate
%
|
Group
provision
£'000
|
ECL
provision
£'000
|
Total provision for
impairment
of trade
receivables
£'000
|
Up to 3 months
|
23,556
|
0.015
|
-
|
333
|
333
|
3 to 6 months
|
3,185
|
0.020
|
-
|
71
|
71
|
6 to 12 months
|
2,078
|
0.051
|
-
|
149
|
149
|
Over 12 months
|
3,170
|
0.591
|
3,033
|
99
|
3,132
|
Trade receivables
|
31,989
|
0.096
|
3,033
|
652
|
3,685
|
|
|
|
|
|
|
Contract assets
|
3,388
|
0.012
|
-
|
40
|
40
|
|
|
|
|
|
|
Total
|
35,377
|
0.020
|
3,033
|
692
|
3,725
|
Movements on the provision for impairment of
trade receivables and contract assets were as follows:
|
2024
£'000
|
2023
£'000
|
At 1 March
|
3,725
|
3,159
|
Bad debt charge
|
697
|
238
|
Receivables written off during the
year as uncollectible
|
(1,585)
|
-
|
Reclassification of other
provisions
|
-
|
328
|
At 29/28 February
|
2,837
|
3,725
|
Amounts receivable written off in the year
relate to previously fully provided for amounts.
Contract assets
The Group's contract assets related to accrued
income which has not yet been invoiced at the Balance Sheet date.
Significant changes in contract assets during the period are
analysed as follows:
|
|
£'000
|
At 1 March 2023
|
|
3,388
|
Contract assets converted to
receivables on completion
|
|
(3,292)
|
Contract assets arising on new
contracts in-year
|
|
1,421
|
At 29 February 2024
|
|
1,517
|
4.3 Trade and other payables
Commissions payable to co-brokers are
recognised in trade payables due within one year on the earlier of
the date of invoicing or the date of receipt of cash. The
accounting policy for lease liabilities is set out in Note
3.6.
Current liabilities
|
2024
£'000
|
2023
£'000
|
Trade payables
|
2,214
|
1,809
|
Lease liabilities
|
1,925
|
2,923
|
Other taxation and social
security
|
560
|
1,869
|
Other payables
|
1,974
|
767
|
Contract liabilities
|
334
|
329
|
Accruals
|
36,604
|
49,613
|
Total
|
43,611
|
57,310
|
Accruals primarily includes accrued bonuses and
other general accruals.
The directors consider that the carrying
amounts of trade payables approximate to their fair
value.
4.4 Financial instruments and
risk management
The Group is exposed through its operations to
the following financial risks:
- Currency
risk;
- Interest rate
risk;
- Credit risk;
and
- Liquidity
risk.
In common with all other businesses, the Group
is exposed to risks that arise from its use of financial
instruments. This note describes the Group's objectives, policies
and processes for managing those risks and the methods used to
measure them. Further quantitative information in respect of these
risks is presented throughout the Financial Statements.
There have been no substantive changes in the
Group's exposure to financial instrument risks, its objectives,
policies, and other processes for managing those risks or the
methods used to measure them from previous periods.
a) Financial instruments
i) Principal financial
instruments
The principal financial instruments used by
the Group, from which financial risks arise, are as
follows:
- Trade and other
receivables;
- Cash and cash
equivalents;
- Deferred
consideration receivable;
- Contingent
consideration receivable;
- Unlisted
investments;
- Trade and other
payables;
- Revolving credit
facility;
- Lease
liabilities; and
- Derivative
financial instruments.
ii) Financial instruments by
category
Financial instruments measured at fair
value
The Group's financial assets and liabilities
measured at fair value through profit and loss, including their
fair value hierarchy, are as follows. Fair value is the amount at
which a financial instrument could be exchanged in an arm's length
transaction, other than in a forced or liquidated sale.
|
Level 1
£'000
|
Level 2
£'000
|
Level 3
£'000
|
As at
29 Feb
2024
£'000
|
Financial assets:
|
|
|
|
|
Unlisted investment
|
-
|
-
|
1,633
|
1,633
|
Contingent consideration
receivable
|
-
|
-
|
1,082
|
1,082
|
Derivative
contracts1
|
-
|
1,536
|
-
|
1,536
|
Total
|
-
|
1,536
|
2,715
|
4,251
|
Financial liabilities:
|
|
|
|
|
Derivative
contracts1
|
-
|
218
|
-
|
218
|
Embedded derivative
|
-
|
-
|
140
|
140
|
Total
|
-
|
218
|
140
|
358
|
|
Level
1
£'000
|
Level
2
£'000
|
Level
3
£'000
|
As
at
28 Feb
2023
£'000
|
Financial assets:
|
|
|
|
|
Unlisted investment
|
-
|
1,780
|
-
|
1,780
|
Contingent consideration
receivable
|
-
|
-
|
1,407
|
1,407
|
Derivative
contracts1
|
-
|
1,254
|
-
|
1,254
|
Total
|
-
|
3,034
|
1,407
|
4,441
|
Financial liabilities:
|
|
|
|
|
Derivative
contracts1
|
-
|
1,760
|
-
|
1,760
|
Embedded derivative
|
-
|
-
|
384
|
384
|
Total
|
-
|
1,760
|
384
|
2,144
|
1Currency forwards
with a fair value of £1.3 million (2023: £1.2 million) maturing
within twelve months have been shown as current assets. Currency
forwards with a fair value of £0.2 million (2023: £0.0 million)
maturing within 12 to 24 months of the Balance Sheet date have been
shown as non-current assets. Liabilities include currency forwards
with a fair value of £0.2 million (2023: £1.1 million) maturing
within twelve months shown as current liabilities and currency
forwards with a fair value of £0.0 million (2023: £0.7 million)
maturing within 12 to 24 months of the Balance Sheet date shown as
non-current liabilities.
Fair value hierarchy
The level in the fair value hierarchy within
which the financial asset or liability is categorised is determined
on the basis of the lowest level input that is significant to the
fair value measurement.
Financial assets and liabilities are
classified in their entirety into one of three levels:
- Level
1: Quoted prices (unadjusted) in active
markets for identical assets or liabilities.
- Level
2: Inputs other than quoted prices included
within Level 1 that are observable for the asset or liability,
either directly or indirectly.
- Level
3: Inputs for the asset or liability that
are not based on observable market data.
Valuation processes
The Group's finance team and Group
Chief Financial Officer are responsible for fair value measurement
of financial instruments and makes the decision as to the valuation
technique to be applied, along with the level of external support
required. The Group uses external specialists to value some of the
financial instruments included within Level 3 of the fair value
hierarchy. The results of those valuations are reviewed at each
reporting date within the finance team.
The following table provides a reconciliation
of movements in Level 3 financial assets during the
year:
|
Contingent consideration
receivable
£'000
|
Unlisted
investments
£'000
|
Opening fair value
|
1,407
|
-
|
Transfer into level 3
|
-
|
1,780
|
Unrealised fair value gain/(loss)
recognised in operating costs
|
83
|
(147)
|
Cash settlement
|
(408)
|
-
|
Total
|
1,082
|
1,633
|
Unlisted investments
The unlisted investment primarily relates to
the Group's investment in the London Tanker's Broker Panel, see
Note 3.3. In the prior year the investment was carried at fair
value, based on the value of the most recent comparable transaction
and was therefore classified as Level 2 in the fair value
hierarchy. Due to the time which has passed since the most recent
comparable market transaction, the Group has valued the investment
in the current year based on an income approach which has resulted
in the fair value being deemed to be in Level 3 of the fair value
hierarchy. The Group's policy is that the beginning of the
financial year is considered the date of transfer between levels in
the fair value hierarchy. The significant unobservable inputs into
the valuation are:
- a
discount rate of 16.4%; and
- expected
income from the investment.
An increase in the discount rate of 2% would
result in an increased fair value loss of £0.1 million recognised
in the Income Statement, while a decrease in the discount rate of
2% would result in a gain of £0.2 million recognised in the Income
Statement. A 10% increase/decrease in expected income would result
in a £0.1 million gain/loss.
Contingent consideration receivable
The fair value of the contingent consideration
receivable includes unobservable inputs and are therefore
classified as Level 3. The contingent consideration
receivable relates to the disposal of the Logistics Division
whereby the Group is entitled to three future cash payments. The
SPA provides for a minimum guaranteed amount in each of the three
years; this amount has been classified as deferred consideration.
The balance of the earnout consideration is contingent on the
future performance of the combined business up to a maximum
specified in the SPA; this has been classified as contingent
consideration. The fair value of the contingent consideration has
been calculated by reference to management's expectation of the
future profitability of the combined business and discounted to
present value using a discount rate of 5.29%. The discount rate is
based on the credit risk of Vertom Agencies BV assessed by a
third-party credit agency. See Note 4.9 for further details
and a sensitivity analysis on the contingent element.
Derivative contracts
Contracts with derivative counterparties are
based on ISDA Master Agreements. Under the terms of these
arrangements, only in certain situations will the net amounts
owing/receivable to a single counterparty be considered
outstanding. The Group does not have the present legal ability to
set-off these amounts and so they are not offset in the Balance
Sheet. Of the derivative assets and derivative liabilities
recognised in the Balance Sheet, an amount of £0.2 million (2023:
£0.1 million) would be set off under enforceable master netting
agreements.
Forward currency contracts
The fair value of the forward currency
contracts are based on prices quoted by the counterparty within
these contracts versus the market rate at the Balance Sheet date
and have therefore been classified as Level 2 in the fair value
hierarchy. See the currency risk section for further
details.
Currency options
The fair value of the currency options are
based on prices quoted by the counterparty within these contracts
versus the market rate at the Balance Sheet date and have therefore
been classified as Level 2 in the fair value hierarchy.
Embedded derivative
The convertible loan note instruments issued on
the acquisition of Naves contain an embedded derivative, being a
euro liability of principal and interest. The equity value of the
underlying derivative is not considered closely related to the debt
host, therefore the loan note is considered to be a financial
liability host with an embedded derivative convertible feature
which is required to be separated from the host. The fair value of
the embedded derivative includes unobservable inputs and is
therefore classified as Level 3. The key assumptions underpinning
the fair value of the embedded derivative relate to the expected
future share price of the Group and the GBP:EUR exchange rate. The
fair value has been determined using a Black-Scholes valuation
model.
A gain of £244,000 (2023: loss of £18,000) has
been recognised in the Income Statement in respect of the fair
value movement of the embedded derivative from 1 March 2023 to 29
February 2024.
Financial instruments not measured at fair
value
The Group's financial assets and liabilities
that are not measured at fair value are measured at amortised cost.
Due to their short-term nature or frequent repricing, the carrying
value of these financial instruments approximates their fair value.
Their carrying values are as follows:
Financial assets
|
2024
£'000
|
2023
£'000
|
Cash and cash
equivalents
|
27,951
|
34,735
|
Deferred consideration receivable
|
2,620
|
3,637
|
Trade and other
receivables
|
30,159
|
41,448
|
Total
|
60,730
|
79,820
|
Financial liabilities
|
2024
£'000
|
2023
£'000
|
Trade and other
payables
|
4,851
|
6,446
|
Convertible loan notes
|
2,978
|
3,551
|
Long term borrowings
|
26,966
|
27,815
|
Total
|
34,795
|
37,812
|
Deferred consideration
receivable
The initial fair value of the deferred
consideration receivable was determined by discounting the
guaranteed minimum amounts as per the SPA to present value using a
discount rate of 2.39% and it is subsequently measured at amortised
cost.
b) Currency risk
Currency risk arises when Group entities enter
into transactions denominated in a currency other than their
functional currency. The Group's policy is, where possible, to
allow Group entities to settle liabilities denominated in their
functional currency with the cash generated from operations in that
currency. The Group's currency risk exposure arises mainly as a
result of the majority of its earnings being denominated in US
dollars while the majority of its costs are denominated in
sterling. There is also some currency exposure related to
convertible loan notes and deferred consideration denominated in
euros and from the carrying values of its overseas subsidiaries
being denominated in foreign currencies.
The Group manages its transactional exposures
to foreign currency risks using forward exchange contracts and
currency options. The Group is primarily exposed to fluctuations in
US dollar to sterling exchange rates on foreign currency sales and
hedges a proportion of those expected cash flows out to 17 months.
The principal source of hedge ineffectiveness is the risk of
changes in timing of the forecast transaction or that they do not
occur, which is addressed by only hedging a proportion of future
foreign currency sales. There were no hedged transactions forecast
in the current year which did not occur (2023: £nil).
The Group's results, which are reported in
sterling, are exposed to changes in foreign currency exchange rates
across a number of different currencies with the most significant
exposures relating to the US dollar. The Group is exposed to the
underlying translational movements which remain outside the control
of the Group. The Group's translational exposures to foreign
currency risks relate to both the translation of income and
expenses and net assets of overseas subsidiaries which are
converted into sterling on consolidation. The Group finances
overseas investments partly through the use of foreign currency
borrowings in order to provide a net investment hedge over the
foreign currency risk that arises on translation of its
foreign currency subsidiaries.
The Group continues to apply hedge accounting
to hedging instruments that meet the criteria set out in IFRS
9.
c) Hedge accounting
Derivatives are initially recognised at fair
value and are subsequently remeasured at their fair value at each
Balance Sheet date with gains and losses recognised immediately in
the Income Statement unless hedge accounting is applied.
Recognition of the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument and, if it is, the
nature of the item being hedged. Changes in the fair value of
derivatives that do not qualify for hedge accounting are recognised
immediately in the Income Statement within finance costs or
income.
To qualify for hedge accounting, the terms of
the hedge must be clearly documented at inception and there must be
an expectation that the derivative will be highly effective in
offsetting changes in the cash flow of the hedged risk. Hedge
effectiveness is tested throughout the life of the hedge and if at
any point it is concluded that the relationship can no longer be
expected to remain highly effective in achieving its objective, the
hedge relationship is terminated.
The fair value of derivative contracts is based
either directly or indirectly on market prices at the Balance Sheet
date.
Financial assets and liabilities are classified
in accordance with the fair value hierarchy specified by IFRS 13.
See Note 4.4.
Cash flow
hedge accounting
Cash flow hedges are used to hedge the
variability in cash flows of highly probable forecast transactions
caused by changes in foreign currency exchange rates and interest
rates. Where a derivative financial instrument is designated in a
cash flow hedge relationship with a highly probable forecast
transaction, the effective part of any change in fair value arising
is deferred in the cash flow hedging reserve within equity, via the
Statement of Comprehensive Income. The Group designates a portion,
being the first US dollar amounts in a particular period, of
forecast revenue transactions in cash flow hedges and reports any
gain or loss as part of revenue when the revenue is recognised. The
gain or loss relating to the ineffective part is recognised in the
Income Statement within net finance expense. Amounts deferred in
the cash flow hedging reserve are reclassified to the Income
Statement in the periods when the hedged item is recognised in the
Income Statement.
If a hedging instrument expires or is sold but
the hedged forecast transaction is still expected to occur, the
cumulative gain or loss at that point remains in equity and is
recognised in accordance with the above policy when the transaction
occurs. If the hedged transaction is no longer expected to take
place, the cumulative unrealised gain or loss recognised in equity
is recognised immediately in the Income Statement.
The critical terms of the hedging instruments
match the hedged transactions in relation to currency, timing and
amounts, meaning there is a clear economic relationship between the
hedging instrument and hedged item as required under IFRS 9.
Thereby, management qualitatively demonstrates that the hedging
instrument and the hedged items will move equally in the opposite
direction.
A gain of £2,231,000 (2023: £4,826,000 loss) in
relation to effective hedges has been recognised in the Income
Statement in respect of derivative contracts which have matured in
the period. No ineffectiveness in relation to hedge accounting has
been recognised in the period.
In the prior year the Group entered into
currency options featuring a "cap and floor" feature. The
intrinsic value of the options is designated in cashflow hedge
relationships. The time value of the options is deferred in equity
as a cost of hedging and reclassified to the Income Statement in
the period that the hedged cash flow affects the Income
Statement.
In a prior year the Group also entered into a
currency option which was not designated in a cash flow hedge
relationship and expired during the year (2023: £0.2 million
liability). The £0.2 million movement in fair value in the period
was charged to the Income Statement (2023: £0.2 million) and is
included within Finance costs.
The effects of the foreign currency-related
hedging instruments on the Group's financial position and
performance are as follows:
Currency options
|
2024
|
2023
|
Carrying amount of
(liability)/asset
|
N/A
|
£(28,000)
|
Total notional amount
|
N/A
|
US
$1,500,000
|
Maturity dates
|
N/A
|
March
2023 to April 2023
|
Hedge ratio
|
N/A
|
1:1
|
Change in fair value of outstanding hedging
instruments since inception of the hedge
|
N/A
|
£(23,000)
|
Change in value of hedged item used to determine
hedge ineffectiveness
|
N/A
|
£23,000
|
Weighted average strike rate for outstanding hedging
instruments
|
N/A
|
1.23 to
1.29
|
Forward currency contracts
|
2024
|
2023
|
Carrying amount of
asset
|
£1,535,990
|
£1,254,000
|
Carrying amount of
liability
|
£(217,622)
|
£(1,547,000)
|
Total notional amount
|
US
$118,950,000
|
US
$123,048,000
|
Maturity dates
|
March 2024 to July
2025
|
March
2023 to November 2024
|
Hedge ratio
|
1:1
|
1:1
|
Change in fair value of outstanding hedging
instruments since inception of the hedge
|
£1,318,368
|
£(218,000)
|
Change in value of hedged item used to determine
hedge ineffectiveness
|
£(1,318,368)
|
£218,000
|
Weighted average strike rate for outstanding hedging
instruments
|
1.25
|
1.22
|
Net investment
hedge accounting
The Group uses its US dollar denominated
borrowings as a hedge against the translation exposure on the
Group's net investment in overseas companies. The Group designates
the spot rate of the loans as the hedging instrument. There was no
ineffectiveness to be recognised on hedges of net investments in
foreign operations. Where the hedge is fully effective at hedging
the variability in the net assets of such companies caused by
changes in exchange rates, the changes in value of the borrowings
are recognised in the translation reserve within equity, via the
Statement of Comprehensive Income. The ineffective part of any
change in value caused by changes in exchange rates is recognised
in the Income Statement within finance income or costs. The
effective portion will be recycled into the Income Statement on the
sale of the foreign operation.
The table below provides further information
on the Group's net investment hedging relationships:
|
2024
£'000
|
2023
£'000
|
Hedge ratio
|
1:1
|
1:1
|
Change in value of hedging instruments due to
foreign currency movements since 1 March
|
(249)
|
124
|
Change in value of the hedged item used to determine
hedge effectiveness
|
249
|
(124)
|
The balances and movements into and out of the
foreign currency translation reserve are shown in the Consolidated
Statement of Comprehensive Income and the Consolidated Statement of
Changes in Equity respectively. The amount in the foreign currency
translation reserve in relation to hedge accounting is a gain of
£0.1 million (2023: £0.1 million loss) and is split as
follows:
- continuing net
investment hedges gain of £0.1 million (2023: £0.1 million loss);
and
- hedging
relationships for which hedge accounting is no longer applied, £nil
(2023: £nil).
The effect on equity and profit before tax if
the US dollar or the euro strengthened/(weakened) by 10% against
sterling, with all other variables being equal, is as
follows:
|
Profit
or loss
|
Equity,
net of tax
|
|
+10%
strengthening £'000
|
-10%
weakening
£'000
|
+10%
strengthening £'000
|
-10%
weakening
£'000
|
29 February 2024
|
|
|
|
|
US dollars
|
1,621
|
(1,621)
|
(9,474)
|
7,100
|
Euros
|
40
|
(40)
|
40
|
(40)
|
Total
|
1,661
|
(1,661)
|
(9,434)
|
7,060
|
|
|
|
|
|
28 February 2023
|
|
|
|
|
US dollars
|
874
|
(1,220)
|
(4,529)
|
3,656
|
Euros
|
(36)
|
36
|
(36)
|
36
|
Total
|
838
|
(1,184)
|
(4,565)
|
3,692
|
d) Interest rate risk
The Group is exposed to interest rate risk from
borrowings at floating rates. The Group minimises its short-term
exposure to interest rate risk on its cash and cash equivalents by
pooling cash balances across the Group's entities.
The Group has not entered into any financial
instruments to fix or hedge the interest rates applied to its bank
borrowings and overdrafts.
The following table sets out the carrying
amount, by maturity, of the Group's financial instruments which are
exposed to interest rate risk:
|
Note
|
2024
£'000
|
2023
£'000
|
Floating rate:
|
|
|
|
Within one year
|
|
|
|
Cash and cash
equivalents
|
4.5
|
27,941
|
34,735
|
Long-term borrowings
|
4.6
|
(27,237)
|
(27,815)
|
|
|
704
|
6,920
|
Cash balances are generally held on overnight
deposits at floating rates depending on cash requirements and the
prevailing market rates for the amount of funds deposited. The
other financial instruments of the Group are non-interest
bearing.
The effect on equity and profit before tax of
a 1% increase/(decrease) in the interest rate, all other variables
being equal, is as follows:
|
Profit
or loss
|
Equity,
net of tax
|
|
+1% increase
£'000
|
-1% decrease
£'000
|
+1% increase
£'000
|
-1% decrease
£'000
|
29 February 2024
|
|
|
|
|
Cash and cash
equivalents
|
308
|
(308)
|
308
|
(308)
|
Long-term borrowings
|
(266)
|
266
|
(266)
|
266
|
Total
|
42
|
(42)
|
42
|
(42)
|
|
|
|
|
|
28 February 2023
|
|
|
|
|
Cash and cash
equivalents
|
187
|
(187)
|
187
|
(187)
|
Long-term borrowings
|
(195)
|
195
|
(195)
|
195
|
Total
|
(8)
|
8
|
(8)
|
8
|
e) Credit risk
The maximum exposure to credit risk at the end
of the reporting period is the carrying amount of each class of
financial assets. Concentrations of credit risk with respect
to trade receivables are limited due to the diversity of the
Group's customer base. The directors believe there is no further
credit risk provision required in excess of normal provisions for
doubtful receivables, estimated by Management based on prior
experience and their assessment of the current economic
environment. The Group seeks to trade only with creditworthy
parties and carries out credit checks where appropriate. The
maximum exposure is the carrying amount as disclosed in Note
4.4.
f) Liquidity risk
Liquidity risk arises from the Group's
management of working capital and the finance charges and principal
repayments on its debt instruments. It is the risk that the Group
will encounter difficulty in meeting its financial obligations as
they fall due.
The Group's policy is to ensure that it will
always have sufficient cash to allow it to meet its liabilities
when they become due. Management receives rolling 13-week cash flow
projections on a weekly basis to ensure the Group has sufficient
liquidity.
The board receives rolling twelve month cash
flow projections on a monthly basis as well as information
regarding cash balances. At the end of the financial year, these
projections indicated that the Group expected to have sufficient
liquid resources to meet its obligations under all reasonably
expected circumstances.
The following table sets out the undiscounted
contractual amounts due, in relation to the Group's financial
liabilities which exposes the Group to liquidity risk:
At 29 February 2024
|
Up to
3 months
£'000
|
Between
3 and
12 months
£'000
|
Between
1 and
2 years
£'000
|
Between
2 and
5 years
£'000
|
Over
5 years
£'000
|
Total
contractual
amount
£'000
|
Total
carrying
amount
£'000
|
Trade and other
payables
|
4,245
|
606
|
-
|
-
|
-
|
4,851
|
4,851
|
Loans and borrowings
|
487
|
1,460
|
28,586
|
-
|
-
|
30,533
|
26,966
|
Lease liabilities
|
846
|
1,253
|
1,013
|
2,062
|
44
|
5,218
|
4,778
|
Convertible loan notes
|
46
|
47
|
3,190
|
-
|
-
|
3,283
|
2,978
|
Total
|
5,624
|
3,366
|
32,789
|
2,062
|
44
|
43,885
|
39,573
|
|
|
|
|
|
|
|
|
Forward currency
contracts
|
|
|
|
|
|
|
218
|
Gross outflows
|
1,779
|
7,946
|
1,818
|
-
|
-
|
11,543
|
|
Gross inflows
|
(1,769)
|
(7,784)
|
(1,775)
|
-
|
-
|
(11,328)
|
|
Currency options
|
|
|
|
|
|
|
-
|
Gross outflows
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Gross inflows
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Net outflow from derivative
contracts
|
10
|
162
|
43
|
-
|
-
|
215
|
|
At 28 February 2023
|
Up to
3 months
£'000
|
Between
3 and
12 months
£'000
|
Between
1 and
2 years
£'000
|
Between
2 and
5 years
£'000
|
Over
5 years
£'000
|
Total
contractual
amount
£'000
|
Total
carrying
amount
£'000
|
Trade and other
payables
|
4,971
|
1,388
|
87
|
-
|
-
|
6,446
|
6,446
|
Loans and borrowings
|
422
|
1,266
|
1,688
|
29,242
|
-
|
32,618
|
27,815
|
Lease liabilities
|
757
|
2,271
|
1,375
|
799
|
23
|
5,225
|
5,027
|
Convertible loan notes
|
66
|
764
|
109
|
3,726
|
-
|
4,665
|
3,551
|
Total
|
6,216
|
5,689
|
3,259
|
33,767
|
23
|
48,954
|
42,839
|
|
|
|
|
|
|
|
|
Forward currency
contracts
|
|
|
|
|
|
|
1,547
|
Gross
outflows
|
14,749
|
48,925
|
29,414
|
-
|
-
|
93,088
|
|
Gross
inflows
|
(14,553)
|
(48,866)
|
(28,521)
|
-
|
-
|
(91,940)
|
|
Currency options
|
|
|
|
|
|
|
213
|
Gross
outflows
|
3,107
|
5,593
|
1,864
|
-
|
-
|
10,564
|
|
Gross
inflows
|
(3,084)
|
(5,593)
|
(1,864)
|
-
|
-
|
(10,541)
|
|
Net outflow from derivative
contracts
|
219
|
59
|
893
|
-
|
-
|
1,171
|
|
Loans and borrowings have been represented to
show the expected interest payments payable on the revolving credit
facility in addition to the repayment of the loan.
g) Capital management
The Group manages its capital structure so as
to maintain investor and market confidence and to provide returns
to shareholders that will support the future development of the
business. The Group makes adjustments to the capital structure if
required in response to changes in economic conditions. The Group
considers its capital as consisting of ordinary shares and retained
earnings. To maintain or adjust the capital structure, the Group
may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares.
The Group has a policy of maintaining positive
cash balances and also has a revolving credit facility which it
draws down as required to provide cover against the cyclical nature
of the shipping industry.
The board monitors underlying business
performance to determine the ongoing use of capital, namely
executive and staff incentive schemes (and whether to fund this
through cash or share incentives); acquisition appraisals ahead of
potential business combinations; investment in property, plant and
equipment; and the level of dividends.
No changes were made in the objectives,
policies or processes during the years ended 29 February 2024 and
28 February 2023.
4.5 Cash and cash
equivalents
Cash and cash equivalents included in the
Balance Sheet comprise cash in hand, short-term deposits with an
original maturity of three months or less and restricted
cash.
Cash and cash equivalents included in the Cash
Flow Statement include cash and short-term deposits. Bank
overdrafts are included in the Balance Sheet within short-term
borrowings.
|
2024
£'000
|
2023
£'000
|
Cash at bank and cash in
hand
|
27,951
|
34,735
|
Total
|
27,951
|
34,735
|
Cash and cash equivalents largely comprise bank
balances denominated in sterling, US dollars, euros and other
currencies for the purpose of settling current
liabilities.
Cash includes an amount of £4.6 million (2023:
£4.0 million) held in the bank accounts of regulated entities where
there is a requirement to hold a certain amount of cash at any one
time in order to cover future obligations. No charge or other
restriction of use is held over this cash.
The Directors consider that the carrying
amounts of these assets approximate to their fair value.
4.6 Long-term borrowings
Arrangement costs for loan facilities are
capitalised and amortised over the life of the debt at a constant
rate. Finance costs are charged to the Income Statement, based on
the effective interest rate of the associated external borrowings
and debt instruments.
Modification of terms of financial
liabilities
When the terms of an existing financial
liability are modified, management will consider both quantitative
and qualitative factors to assess whether the modification is
substantial. In the case that the modification of the terms of
existing financial liability is considered to be substantial, the
modification shall be accounted for as an extinguishment of that
financial liability and the recognition of a new financial
liability. If the modification is not considered substantial,
then the existing financial liability is remeasured in accordance
with its original classification and any gain or loss is recognised
immediately in the Income Statement.
|
2024
£'000
|
2023
£'000
|
Long-term borrowings
|
|
|
Secured revolving credit
facilities
|
26,966
|
27,815
|
Lease liabilities
|
2,853
|
2,104
|
Total
|
29,819
|
29,919
|
The Group's revolving credit facility ("RCF")
is for £30.0 million plus an accordion limit of £10.0 million and
has an initial termination date of November 2025 with an option,
subject to lender approval, to extend the term of the facility by
24 months. Drawdown of the accordion facility is subject to
additional credit approval. The RCF agreement has an EBITDA
leverage covenant of 2.5x and a minimum interest cover of 4x.
At 31 May 2023, 31 August 2023, 31 November 2023 and
29 February 2024 the Group met all financial covenant
tests. Amounts can be rolled on a monthly basis until the
facility expires subject to certain conditions, and on that basis
the borrowings have been classified as non-current. The
amounts drawn under the RCF bear interest based on SONIA, SOFR and
EURIBOR from amounts drawn in sterling, US dollars and euros
respectively, plus a credit margin dependent on the Group's
leverage ratio.
All revolving credit facilities are drawn by
Braemar Plc and appear in the accounts of the Company. See
Note 4.5 for details of the Group's cash pooling arrangements and
the net overdraft available to the Group.
The directors consider that the fair value of
the revolving credit facility liability is equivalent to its
carrying amount.
4.7 Convertible loan notes
The convertible loan notes are considered to be
a financial liability host with an embedded derivative convertible
feature which is required to be separated from the host. The Group
has an accounting choice to record the instrument in its entirety
at fair value through profit and loss but has not chosen to apply
this treatment. Instead, the financial liability host is recognised
as a euro liability initially recognised at fair value and
prospectively accounted for applying the effective interest rate
method. As the loan notes are denominated in euros, the conversion
feature does not meet the definition of an equity instrument. As a
result, it is treated as a separated embedded derivative and is
recognised at fair value through profit and loss. Where there are
conversion options that can be exercised within one year the
liability is recognised as current.
In September 2017, the Group acquired the
entire share capital of Naves Corporate Finance GmbH ("Naves").
Naves is an established and successful business, headquartered in
Hamburg, Germany, which advises national and international clients
on corporate finance related to the maritime industry, including
restructuring advisory, corporate finance advisory, M&A, asset
brokerage, interim/pre-insolvency management and financial asset
management including loan servicing.
The acquisition agreement provided for
consideration of £16.0 million (€18.4 million) payable as
follows:
i) at
completion in cash of £7.3 million (€8.3 million), in shares of
£1.3 million (€1.5 million) and in convertible loan notes of £6.4
million (€7.4 million); and
ii) deferred
consideration in cash of £0.5 million (€0.6 million) and
convertible loan notes of £0.5 million (€0.6 million), payable in
instalments over the three years after the acquisition.
The acquisition agreement also provided
deferred amounts that would be payable to management sellers,
conditional on their ongoing service in the business. IFRS 3 states
that amounts paid to former owners which are conditional on ongoing
service are for the benefit of the acquirer and not for the benefit
of former owners. Consideration linked to the ongoing service of
former owners is treated as remuneration for post-combination
services and classified as acquisition-related expenditure under
specific items in the Income Statement.
The deferred amounts payable to management
sellers comprised:
i)
deferred cash of £1.3 million (€1.5 million) and deferred
convertible loan notes of £4.3 million (€4.9 million) conditional
only on the individual management seller's continued service
payable in instalments over the five years after the acquisition;
and
ii) deferred
convertible loan notes of up to £9.4 million (€11.0 million)
conditional on the individual management seller's continued service
and the post-acquisition Naves' EBIT in the three years
post-acquisition. By February 2021, there was no contingency
remaining and the total amount paid was £4.6 million (€5.3
million).
Following the issuance of new convertible loan
notes in the prior year, at February 2024 no amounts are subject to
future service conditions.
No post-acquisition remuneration associated
with the acquisition was incurred during the year ended 29 February
2024 (2023: £0.1 million).
Convertible instruments
The Group issued convertible loan notes in
connection with its acquisition of Naves in September
2017.
These convertible loan note instruments are
unsecured, unlisted and non-transferable. The notes are euro
denominated and carry a 3% per annum coupon. Each tranche is
redeemable on or after two years from the date of issue by the
Group or by the individual holder. The conversion prices were fixed
at 390.3 pence for management sellers and 450.3 pence for
non-management sellers.
The convertible loan note instruments carry
certain accelerated conversion rights in the event of default on
financial commitments associated with the instruments or business
distress within the Group. The loan notes shall automatically
convert or be redeemed in the event that any person or persons
acting in concert hold more than 50% of the issued share capital of
the Group or an impairment charge in excess of £43.9 million (€50.0
million) is reflected in the audited Financial Statements of the
Group.
The embedded derivatives within the convertible
loan notes are valued using level 3 hierarchy techniques under IFRS
13. See Note 4.4.
The total value of convertible loan note
liabilities, including linked derivatives, is £3.1 million (2023:
£3.9 million). The following table shows
amounts in the Group balance sheet relating to the convertible loan
notes issued on the acquisition of Naves.
|
|
|
2024
|
2023
|
Represented in the Group Balance
Sheet
|
|
|
£'000
|
£'000
|
Current liabilities:
|
|
|
|
|
Convertible loan notes
|
|
|
632
|
699
|
Non-current liabilities:
|
|
|
|
|
Convertible loan notes
|
|
|
2,346
|
2,852
|
Derivatives
|
|
|
140
|
384
|
|
|
|
2,486
|
3,236
|
|
|
|
3,118
|
3,935
|
The movement in the Naves-related balances in
the Group Balance Sheet during the year is explained by the items
below:
|
2024
|
2023
|
|
£'000
|
£'000
|
|
|
|
Total Naves-related balances at
start of year
|
3,935
|
4,917
|
|
|
|
Finance expense
|
227
|
408
|
Derivative (gain)/loss
|
(244)
|
18
|
Post-acquisition
remuneration
|
-
|
59
|
Foreign exchange
movements
|
(89)
|
250
|
Cash paid
|
(711)
|
(1,606)
|
Equity issued
|
-
|
(111)
|
Total movements
|
(817)
|
(982)
|
|
|
|
Total Naves-related balances at
year-end
|
3,118
|
3,935
|
The current year cash paid
includes interest of £0.1 million (2023: £0.2 million).
The loan notes have the following
maturities:
|
Accounting
value
|
Nominal
value
|
|
2024
|
2023
|
2024
|
2023
|
|
£'000
|
£'000
|
€'000
|
€'000
|
Due at the reporting
date
|
|
|
|
|
30-Sep-23
|
-
|
606
|
-
|
699
|
30-Sep-24
|
568
|
550
|
699
|
699
|
30-Sep-25
|
2,410
|
2,395
|
2,929
|
2,929
|
|
2,978
|
3,551
|
3,628
|
4,327
|
Derivatives thereon
|
140
|
384
|
|
|
Total liabilities on loan
notes
|
3,118
|
3,935
|
|
|
Note that current liabilities in respect of the
loan notes differs from the amounts shown above maturing within one
year due to interest payable within one year on non-current loans
and the outstanding current liability to deliver cash and shares in
respect of matured loan notes.
4.8 Reconciliation of liabilities
from financing activities
|
RCF
borrowings
£'000
|
Convertible loan notes
|
Deferred
consideration
£'000
|
Lease
liabilities
£'000
|
Total
£'000
|
At 1 March 2023
|
27,815
|
3,551
|
-
|
5,027
|
36,393
|
Cash flows
|
(598)
|
(598)
|
-
|
(3,143)
|
(4,339)
|
Non-cash flows:
|
|
|
|
|
|
- Interest accruing in the
period
|
153
|
114
|
-
|
-
|
267
|
- Fees paid reported as operating
cash flows
|
(122)
|
-
|
-
|
-
|
(122)
|
- New leases
|
-
|
-
|
-
|
3,021
|
3,021
|
- Effects of foreign
exchange
|
(282)
|
(89)
|
-
|
(127)
|
(498)
|
At 29 February 2024
|
26,966
|
2,978
|
-
|
4,778
|
34,722
|
Current portion
|
-
|
632
|
-
|
1,925
|
2,557
|
|
RCF1
borrowings
£'000
|
Convertible1 loan notes
£'000
|
Deferred
consideration
£'000
|
Lease
liabilities
£'000
|
Total
£'000
|
At 1 March 2022
|
23,254
|
4,171
|
495
|
8,506
|
36,426
|
Cash flows2
|
4,694
|
(1,448)
|
-
|
(3,864)
|
(618)
|
Non-cash flows:
|
|
|
|
|
|
- Shares issued
|
-
|
(111)
|
-
|
-
|
(111)
|
- Derivatives issued
|
-
|
(71)
|
-
|
-
|
(71)
|
- Accrual of service
cost
|
-
|
|
59
|
-
|
59
|
- Interest accruing in the
period2
|
32
|
250
|
-
|
-
|
282
|
- Fees paid reported as operating
cash flows
|
(336)
|
-
|
-
|
-
|
(336)
|
- New leases
|
-
|
-
|
-
|
770
|
770
|
- Business combinations
|
-
|
-
|
-
|
86
|
86
|
- Lease terminations
|
-
|
-
|
-
|
(632)
|
(632)
|
- Amounts reclassified from
deferred consideration to loans
|
-
|
615
|
(615)
|
-
|
-
|
- Effects of foreign
exchange
|
171
|
145
|
61
|
161
|
538
|
At 28 February 2023
|
27,815
|
3,551
|
-
|
5,027
|
36,393
|
Current portion
|
-
|
699
|
-
|
2,923
|
3,622
|
1 In the prior year,
RCF borrowings and the convertible loan notes were disclosed in the
aggregate. The movement in balances during the year ended 28
February 2023 has been updated to reflect the current year
presentation which provides the reconciliation separately for the
RCF and the convertible loan notes.
2 In the prior year,
'Interest accruing in the period' included cash settled interest
charges in relation to lease liabilities and the combined total for
the RFC and convertible loan notes. These charges were offset by
interest 'Cash flows' as reported in the reconciliation. The prior
year numbers have been updated to remove these interest cash flows
from both 'Interest accruing in the period' and 'Cash flows'. The
effect is to reduce 'Cash flows' by £0.5 million and reduce
'Interest accruing in the period' by £0.2 million and include an
additional item relating to fees paid of £0.3 million. There is no
overall impact on total reported cash flows, opening or closing
balances.
4.9 Deferred and contingent
consideration receivable
Contingent consideration receivable is
initially recognised at fair value and is subsequently remeasured
at its fair value at each Balance Sheet date. The resulting
gain or loss is recognised immediately in the Income
Statement. Contingent consideration receivable is classified
as Level 3 in accordance with the fair value hierarchy specified by
IFRS 13. Deferred consideration is initially measured at its fair
value and subsequently measured at amortised cost less provision
for impairment.
Key
estimate
On 28 February 2022, the Group sold Cory
Brothers to Vertom Agencies BV for maximum consideration of £15.5
million. Initial cash proceeds of £6.5 million were received on
completion of the transaction, and three contractual "earn out"
payments will be made, being an agreed percentage of the future
gross profits of the combined VertomCory business over three
subsequent twelve month earn out periods. The remaining "earnout"
payments are subject to a combined minimum of £2.7 million and a
combined maximum of £6.4 million.
The minimum earnout consideration has been
classified as deferred consideration receivable. The minimum amount
is specified in the SPA and is therefore not an estimate, however
an estimate of a discount rate is necessary to discount the
deferred consideration receivable. A discount rate of 2.39% was
used to calculate the net present value; this was based on the
credit risk of Vertom Agencies BV following a credit check
performed by management. Deferred consideration receivable is
initially recognised at fair value and subsequently measured at
amortised cost.
The balance of the earnout consideration, up to
the maximum specified in the SPA has been classified as contingent
consideration receivable because it is contingent on the future
profitability of the combined business. The fair value of the
contingent consideration receivable involves two critical
estimates: the future profitability of the combined business and
the discount rate used to calculate the net present value. The
future profitability forecasts are based on a business plan
prepared by the combined VertomCory business. Contingent
consideration receivable is initially recognised at fair value and
subsequently measures at fair value through profit and
loss.
The fair value of the contingent consideration
is calculated using the forecast gross profit for the combined
VertomCory business for each earnout period, applying the agreed
percentage, deducting the minimum payment and discounting the
forecast contingent cashflows. The valuation of the
contingent consideration involves two critical estimates: the
future profitability of the combined business and the discount rate
used to calculate the net present value. The future profitability
forecasts are based on a business plan prepared by the combined
VertomCory business and was reviewed by management as part of the
financial due diligence process. A discount rate of 5.45% (2023:
5.29%) was used to calculate the net present value; this was based
on the credit risk of Vertom Agencies BV following a credit check
performed by management.
Set out below is a sensitivity analysis of the
contingent consideration receivable to the discount rate and the
assumptions of future profitability.
|
Fair value of Cory Brothers deferred and
contingent consideration receivable
The agreed minimum earnout payment is presented
as deferred consideration and measured at amortised cost, using a
discount rate of 2.39% determined on initial measurement. The
uncertain element of each earnout payment is measured at fair value
through profit or loss and presented as contingent
consideration.
Deferred and contingent consideration are
included in other long-term receivables (see Note 4.1) and current
other receivables (see Note 4.2). The amortised cost of the
deferred consideration is £2.6 million (2023: £3.6 million).
The fair value of the contingent consideration is £1.1 million
(2023: £1.4 million).
During the year, the Group received £1.5
million (in the Group Cash Flow Statement, £1.4 million is
allocated to investing activities and £0.1 million to interest
received) in relation to the first deferred and contingent
consideration payment. The receivable held on the Balance Sheet at
29 February 2024 in relation to the second earnout payment is £1.9
million (£1.3 million deferred consideration and £0.6 million
contingent consideration).
Sensitivity analysis
Management have considered the sensitivity of
the contingent consideration receivable arising from the second and
third earnout payments to both changes in the estimate of future
profitability of the VertomCory agency business, and the discount
rate selected.
|
|
|
Sensitivity
to the estimate of future gross profits of the VertomCory agency
business
|
Sensitivity
to change in the discount rate selected
|
|
Carrying value
as at 29 February 2024
|
Undiscounted value as at
29 February 2024
|
Decrease by
10%
|
Increase by
10%
|
Decrease by
1% p.a.
|
Increase by
1% p.a.
|
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
Payment due on 31 May 2024
|
550
|
557
|
N/A
|
N/A
|
1
|
(1)
|
Payment due on 31 May 2025
|
532
|
569
|
(177)
|
177
|
6
|
(6)
|
Total
|
1,082
|
1,126
|
(177)
|
177
|
7
|
(7)
|
The 10% increase/decrease in future gross
profits of the VertomCory agency business considered in the
sensitivity analysis is selected to reflect a reasonably likely
variation in outcomes, which lie within a range covered by the
minimum and maximum earnout thresholds. The change in
discount rate considered reflects the observed range of three-year
GBP corporate bond rates with similar credit risk. No sensitivity
is provided for the payment due on 31 May 2024 as the payment
amount is based on actual reported performance.
5 Employee remuneration schemes
5.1 Long-term employee
benefits
Key
estimate
Valuation of defined benefit pension
scheme
The Group uses an independent actuary to
provide annual valuations of the defined benefit pension scheme.
The actuary uses a number of estimates in respect of the scheme
membership, the valuation of assets and assumptions regarding
discount rates, inflation rates and mortality rates.
The membership details are provided by an
independent trustee while the valuation of assets is verified
by an independent fund manager. The discount rates, inflation rates
and mortality rates are reviewed by management at each
reporting date.
Critical
judgement
Recoverability of defined benefit pension
scheme net asset
As a result of actuarial movements during the
year, including an increase in the discount rate from 4.9% at 28
February 2023 to 5.0% at 29 February 2024, the UK defined benefit
scheme continues to be in an actuarial surplus position at 29
February 2024 (measured on an IAS 19 "Employee Benefits" basis) of
£1.4 million (28 February 2023: £1.1 million). The surplus has been
recognised on the basis that the Group has an unconditional right
to a refund, assuming the gradual settlement of Scheme liabilities
over time until all members have left the Scheme. The surplus will
be subject to a tax charge on its recovery which the Group does not
believe meets the definition of an income tax under IAS 12, and, as
a result, the surplus has been presented net of the expected taxes
payable of £0.8 million, at a rate of 35%. The free-standing tax
charge will reduce from 35% to 25% from 6 April 2024, this measure
was substantively enacted on 11 March 2024. The impact of the
change in rate is not expected to have a material impact on the
Group.
The Group has the following long-term employee
benefits:
i) Defined
contribution schemes
The Group operates a number of defined
contribution schemes. Pension costs charged against profits in
respect of these schemes represent the amount of the contributions
payable to the schemes in respect of the accounting period. The
assets of the schemes are held separately from those of the Group
within independently administered funds. The Group has no further
payment obligations once the contributions have been
paid.
ii) Defined benefit
schemes
The Group operates a defined benefit scheme,
the ACM Staff Pension Scheme, with assets held separately from the
Group. The cost of providing benefits under the scheme is
determined using the projected unit credit actuarial valuation
method which measures the liability based on service completed and
allowing for projected future salary increases and discounted at an
appropriate rate.
The current service cost, which is the
increase in the present value of the retirement benefit obligation
resulting from employee service in the current year, and gains and
losses on settlements and curtailments, are included within
operating profit in the Income Statement. The unwinding of the
discount rate on the scheme liabilities which is shown as a net
finance cost and past service costs are presented and recognised
immediately in the Income Statement.
The pension asset or liability recognised on
the Balance Sheet in respect of this scheme represents the
difference between the present value of the Group's obligations
under the scheme and the fair value of the scheme's assets.
Actuarial gains or losses and return on plan assets net of tax,
excluding interest, are recognised in the period in which they
arise within the Statement of Comprehensive Income.
When the defined benefit plan is in a surplus,
the asset is recognised at the lower of the surplus and the asset
ceiling, less any associated costs, such as taxes
payable.
iii) Other long-term
benefits
The current service cost of other long-term
benefits resulting from employee services in the current year is
included within the Income Statement. The unwinding of any
discounting on the liabilities is shown in net finance
costs.
The Group operates a defined benefit scheme in
the UK. A full actuarial valuation was carried out as at 31 March
2023 and updated by the IAS 19 valuation as at 29 February 2024.
All valuations have been carried out by a qualified independent
actuary.
The Group's obligations in respect of the
funded defined benefit scheme at 29 February 2024 were as
follows:
|
2024
£'000
|
2023
£'000
|
Present value of funded
obligations
|
10,609
|
10,558
|
Fair value of scheme assets, net
of tax
|
(12,023)
|
(11,678)
|
Total surplus of defined benefit
pension scheme
|
(1,414)
|
(1,120)
|
Funded defined benefit scheme
The Group sponsors a funded defined benefit
scheme (the ACM Staff Pension Scheme) for qualifying UK employees.
The Scheme is administered by a separate board of Trustees which is
legally separate from the Group. The Trustees are composed of
representatives of both the employer and employees. The Trustees
are required by law to act in the interest of all relevant
beneficiaries and are responsible for the investment policy with
regard to the trust assets and the day-to-day administration of
benefits.
Under the Scheme, employees are entitled to
annual pensions on retirement at age 60 of 1/60th of final
pensionable salary for each year of service. Pensionable salary is
defined as basic salary plus the average of the previous three
years' bonuses (capped at three times basic salary). Pensionable
salaries for members who joined after 1 June 1989 are also subject
to an earnings cap. Other benefits are payable, for example those
provided on death.
The scheme was closed to future accrual and
from 1 February 2016, post-retirement benefits are provided to
these employees through a separate defined contribution
arrangement.
Profile of the Scheme
The defined benefit obligation includes
benefits for current employees, former employees, and current
pensioners. Broadly, around 50% of the liabilities are attributable
to deferred pensions for current and former employees, with the
remaining 50% to current pensioners.
The Scheme duration is an indicator of the
weighted average time until benefit payments are made. For the
Scheme as a whole, the duration is around 14.8 years (2023: 15.3
years).
Funding implications
UK legislation requires that pension schemes
are funded prudently. The most recent funding valuation of the
Scheme was carried out by a qualified actuary as at 31 March 2023
and showed a surplus of £0.3 million.
Risks associated with the Scheme
The Scheme exposes the Group to a number of
risks, the most significant of which are:
Asset
volatility
The liabilities are calculated using a discount
rate set with reference to corporate bond yields; if assets
underperform this yield, this will create a deficit. The Scheme
holds a significant proportion of growth assets which, though
expected to outperform corporate bonds in the long term, create
volatility and risk in the short term. The allocation to growth
assets is monitored to ensure it remains appropriate given the
Scheme's long-term objectives.
Changes in
bond yields
An increase in corporate bond yields will
decrease the value placed on the Scheme's liabilities for
accounting purposes, although this will be partially offset by a
Decrease in the value of the Scheme's bond holdings.
Inflation
risk
A proportion of the Scheme's benefit
obligations are linked to inflation and higher inflation will lead
to higher liabilities (although, in most cases, caps on the level
of inflationary increases are in place to protect against extreme
inflation). The majority of the assets are either unaffected by or
only loosely correlated with inflation, meaning that an increase in
inflation will also increase the deficit.
Life
expectancy
The majority of the Scheme's obligations are to
provide benefits for the life of the member, so increases in life
expectancy will result in an increase in scheme
liabilities.
The Company and Trustees have agreed a
long-term strategy for reducing investment risk as and when
appropriate. This includes moving assets to match pensioner
liabilities when members reach retirement.
The Trustees insure certain benefits payable on
death before retirement.
The principal assumptions used for updating
the latest valuation of the Scheme were:
|
2024
(% p.a.)
|
2023
(%
p.a.)
|
Discount rate
|
5.0
|
4.9
|
CPI inflation
|
2.6
|
3.0
|
|
|
|
Pension increases:
|
|
|
CPI capped at 2.5% p.a.
|
2.1
|
2.0
|
CPI capped at 5.0% p.a.
|
3.0
|
3.0
|
Deferred pension
increases:
|
|
|
CPI capped at 2.5% p.a.
|
2.1
|
2.0
|
CPI capped at 5.0% p.a.
|
3.0
|
3.0
|
|
|
2024
Years
|
2023
Years
|
Life expectancy from age 60
for:
|
|
|
|
Current 60-year-old
male
|
|
25.6
|
25.1
|
Current 60-year-old
female
|
|
28.0
|
27.7
|
Pre-retirement
mortality
|
|
-
|
-
|
Post-retirement
mortality
|
S2 PXA,
CMI 2022/2021 (min 1.25%)
|
Early retirement
|
No
allowance for early retirement (2023: 33% of members retire at age
55, with the remainder retiring at age 60)
|
Withdrawals from active
service
|
No
allowance
|
Cash commutation
|
80% of
members assumed to take maximum lump sum (2023: 100%)
|
All members are assumed to retire at age
60.
The Scheme's assets are split by type of asset
in the following table.
Scheme assets
|
2024
£'000
|
2023
£'000
|
Scheme assets are comprised as
follows:
|
|
|
UK equities
|
359
|
434
|
Overseas equities
|
4,387
|
4,374
|
Unquoted equities
|
-
|
78
|
High yield debt
|
986
|
1,019
|
Cash
|
1,031
|
707
|
Inflation-linked bonds
|
1,142
|
1,022
|
Corporate bonds
|
2,793
|
1,883
|
Government bonds
|
1,726
|
1,303
|
Other
|
360
|
1,462
|
Total
|
12,784
|
12,282
|
The Pension Scheme assets do not include any
ordinary shares issued by the Company. All assets are held through
pooled investment vehicles.
Expense recognised in the Income Statement (included in
operating costs)
|
2024
£'000
|
2023
£'000
|
Current service cost
|
-
|
-
|
Interest (income)/expense on net
asset/liability
|
(85)
|
54
|
Expense recognised in Income
Statement
|
(85)
|
54
|
|
|
|
Remeasurements in other comprehensive
expense:
|
|
|
(Gain)/loss on assets in excess of
that recognised in net interest
|
(201)
|
1,061
|
Actuarial gains due to changes in
financial assumptions
|
(179)
|
(4,594)
|
Actuarial loss/(gain) due to
changes in demographic assumptions
|
127
|
(220)
|
Actuarial (gain)/loss due to
liability experience
|
(77)
|
374
|
Deferred tax charge
|
-
|
414
|
Expected tax charge on recovery of
assets
|
157
|
604
|
Gain recognised in other
comprehensive income
|
(173)
|
(2,361)
|
|
|
|
Total amount recognised in Income
Statement and other comprehensive expense
|
(258)
|
(2,307)
|
Changes to the present value of
the defined benefit obligation are analysed as follows:
|
2024
£'000
|
2023
£'000
|
Opening defined benefit
obligation
|
10,558
|
15,156
|
Interest expense
|
517
|
402
|
Actuarial gains due to changes in
financial assumptions
|
(179)
|
(4,594)
|
Actuarial loss/(gain) due to
changes in demographic assumptions
|
127
|
(220)
|
Actuarial (gain)/loss due to
liability experience
|
(76)
|
374
|
Net benefit payments from
scheme
|
(338)
|
(560)
|
Closing value at 29 February
(2023: 28 February)
|
10,609
|
10,558
|
Changes in the fair value of plan assets are
analysed as follows:
|
2024
£'000
|
2023
£'000
|
Opening fair value at 1
March
|
11,678
|
13,104
|
Interest income
|
602
|
348
|
Fair value gain/(loss) on
assets
|
201
|
(1,061)
|
Contributions by
employers
|
37
|
450
|
Net benefit payments from
scheme
|
(338)
|
(559)
|
Expected tax charge on recovery of
assets
|
(157)
|
(604)
|
Closing value at 29 February
(2023: 28 February)
|
12,023
|
11,678
|
The Group does not expect to make any
contributions to the scheme in the next twelve months (2023:
£37,500).
Actual return on Scheme assets
|
2024
£'000
|
2023
£'000
|
Interest income on plan
assets
|
602
|
348
|
Remeasurement gain/(loss) on
assets
|
201
|
(1,061)
|
Actual return on assets
|
803
|
(713)
|
Sensitivity analysis
The table below illustrates the sensitivity of
the Scheme liabilities at 29 February 2024 to changes in the
principal assumptions. The sensitivities assume that all other
assumptions remain unchanged and the calculations are approximate
(full calculations could lead to a different result).
Change in assumption
|
Approximate increase in liabilities
%
|
Approximate increase in liabilities
£'000
|
Interest rate reduced by 0.5%
p.a.
|
9.0
|
955
|
Inflation assumption increased by
0.5% p.a.1
|
5.9
|
626
|
Increase in life expectancy of one
year for all members reaching 60
|
2.5
|
265
|
1The inflation assumption sensitivity applies to both the
assumed rate of increase in the CPI and the RPI, and includes the
impact on the rate of increases to pensions, both before and after
retirement.
Defined contribution schemes
There are a number of defined contribution
schemes in the Group, the principal scheme being the Braemar
Pension Scheme, which is open to all UK employees. Cash
contributions paid into the defined contribution schemes are
accounted for as an Income Statement expense as they are incurred.
The total charge for the year in respect of this and other defined
contribution schemes amounted to £2,247,000 (2023: £1,811,000)
which was in respect of continuing operations.
Contributions of £180,000 were due to these
schemes at 29 February 2024 (2023: £nil).
The assets of these schemes are held separately
from those of the Group in funds under the control of the
Trustees.
5.2 Share-based payments
The Group operates a number of equity-settled
share-based payment schemes.
No awards may be granted under the schemes set
out below which would result in the total number of shares issued
or remaining issuable under all of the schemes (or any other Group
share schemes), in the ten-year period ending on the date of grant
of the option, exceeding 10% of the Company's issued share capital
(calculated at the date of grant of the relevant
option).
All of the Group's share schemes are accounted
for as equity-settled share-based payments because they only
entitle the employee to receive equity instrument issued by the
Parent Company. The Group may provide a net settlement feature,
whereby it withholds the number of equity instruments equal to the
monetary value of the employee's tax obligation arising from the
exercise (or vesting) of the award if the total number of shares
that otherwise would have been issued to the employee. The
Group has no contractual obligation to provide a net settlement
option, and therefore the award is still accounted for as an
equity-settled award in full and the value of the shares foregone
by the employee is accounted for as a deduction from equity.
Occasionally the Group, at its discretion, might repurchase vested
equity instruments. In accordance with IFRS 2, such payments to
employees are accounted for as a deduction from equity, except to
the extent the payment exceeds the fair value of the equity
instruments repurchased.
The net cost of the shares acquired for the
shares held by the ESOP and the EBT are a deduction from
shareholders' funds and represent a reduction in distributable
reserves. Note 6.3 provides detail on the ESOP and the EBT and
movements in shares to be issued.
Key
estimate
Share option vesting
The fair value determined at the grant date of
the equity-settled share-based payments is typically expensed on a
straight-line basis over the vesting period, based on the Group's
estimate of the number of equity instruments that will eventually
vest. At each reporting date, the Group revises its estimate
of the number of equity instruments expected to vest as a result of
the effect of non-market-based vesting conditions. The impact of
the revision of the original estimates, if any, is recognised in
the Income Statement such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to
reserves.
A 1% increase in the forfeiture assumption for
all awards which were not vested at 29 February 2024 would result
in an additional charge to the Income Statement of £0.1 million in
FY24, while a 5% increase in the forfeiture assumption would result
in an additional charge of £0.6 million to the Income Statement in
FY24. While the Group believes that a change in estimate of 5% or
greater for all awards in any one year is unlikely, due to the fact
that the value of awards are not uniform between employees, the
Group believes that there is a significant risk that a revision to
the forfeiture estimate could result in a material impact to the
Income Statement in the next financial year depending on the
profile of leavers.
|
Share Option
Scheme
During the prior year the Company operated the
Braemar Plc Savings-Related Share Option Scheme 2014 (the "SAYE
Scheme") and the Braemar Plc International Savings-Related Share
Option Scheme 2019 (the "International SAYE Scheme"). Options
are granted at up to a 20% discount to the prevailing market price
and entitle employees to purchase shares in the Company at a fixed
price subject to continued employment. The fair value of share
options granted under the SAYE schemes is determined using a
binomial pricing model. The number of awards which are expected to
vest is estimated by management based on levels of expected
forfeitures.
Deferred Bonus
Plan ("DBP")
The Company adopted a Deferred Bonus Plan in
May 2020 (the "2020 DBP"), pursuant to which future discretionary
bonus awards will be granted to staff including executive
directors. Awards under the New DBP may be linked to an option
granted under the new Braemar Company Share Option Plan 2020, which
was also adopted by the Company in May 2020 (the "2020 CSOP").
Where an employee receives a linked award under the 2020 DBP, if
the Company's share price rises over the vesting period, the 2020
CSOP award can be exercised with the value of shares delivered on
the vesting of the 2020 DBP award being reduced by the exercise
gain on the 2020 CSOP award. Awards under the 2020 DBP and the 2020
CSOP may be settled by the issue of new shares of by way of
transfer of shares from the ESOP. Historical practice has been to
settle via the transfer of shares from the ESOP and it is the
current intention to continue to operate in this manner.
The number of awards granted under the Deferred
Bonus Plan each year is related to the profits generated in the
previous year. The cost of the award is therefore expensed from the
beginning of that profit period until the vesting date which is
usually three years after the date of award and is subject to
continued employment. Awards made to new joiners are expensed
over the period from date of joining to date of vesting.
Their fair value is estimated based on the share price at the time
of grant less the expected dividend to be paid during the vesting
period. The number of awards which are expected to vest is
estimated by management based on levels of expected
forfeitures.
Restricted
Share Plan ("RSP")
During the year ended 28 February 2015, the
Company established a Restricted Share Plan ("RSP"). This scheme
was set up to grant awards to certain key staff to try to
retain them following the merger between Braemar and ACM Shipping
Group Plc, but it can also be used where the Remuneration Committee
considers it necessary to secure the recruitment of a particular
individual. Executive directors of the Company are not eligible to
participate in the RSP. RSP awards are made in the form of
a nil cost option and there are no performance criteria other
than continued employment. Their fair value is estimated based on
the share price at the time of grant less the expected dividend to
be paid during the vesting period. The number of awards which are
expected to vest is estimated by management based on levels of
expected forfeitures.
Long Term
Incentive Plan ("LTIP)
The Company also operates an LTIP, which was
approved by shareholders and adopted in 2014. LTIP awards under
this plan take the form of a conditional right to receive shares at
£nil cost. The awards normally vest over three years and are
typically subject to a performance condition such as earnings
per share ("EPS") or Total Shareholder Return ("TSR"), a
market-based condition.
The fair value of awards with the EPS condition
are non-market conditions and their fair value is estimated based
on the share price at the time of grant less the expected dividend
to be paid during the vesting period. The fair value of awards
containing market conditions is determined using Monte Carlo
simulation models. The number of awards which are expected to vest
is estimated by management based on levels of expected forfeitures
and the expected outcome of the EPS condition. For awards subject
to market conditions, no adjustment is made to reflect the
likelihood of the market condition being met nor the actual number
of awards which lapse as a result of the condition not being
met.
The Company operates a variety of share-based
payment schemes which are listed below.
a) Share
options
Details of the share options in issue and the
movements in the year are given below:
Share scheme
|
Year
option granted
|
Number
at 1 March 2023
|
Granted
|
Exercised
|
Lapsed
|
Number at
29 February 2024
|
Exercise
price (pence)
|
Exercisable between
|
SAYE
|
N/A
|
-
|
-
|
-
|
-
|
-
|
N/A
|
N/A
|
During the prior year, 433,528 options were
exercised. The weighted average share price on exercise for awards
exercised in the prior year was £2.82.
These options are valued using a binomial
pricing model. The value of the awards was expensed over the
period from the date of grant to the vesting date.
b) Deferred Bonus
Plan
Details of the share awards in issue and the
movements in the year are given below:
Share scheme
|
Number
at
1
March
2023
|
Granted
|
Exercised
|
Forfeited
|
Number at
29
February
2024
|
Exercise
price (pence)
|
Exercisable
|
Jul-20
|
2,833,067
|
-
|
(2,763,777)
|
(69,290)
|
-
|
nil
|
July
2023
|
Nov-20
|
315,975
|
-
|
(315,975)
|
-
|
-
|
nil
|
November
2023
|
Jun-21
|
1,172,051
|
-
|
-
|
(59,162)
|
1,112,889
|
nil
|
June
2024
|
Nov-21
|
239,415
|
-
|
-
|
-
|
239,415
|
nil
|
November
2024
|
Sep-22
|
934,694
|
-
|
-
|
(54,850)
|
879,844
|
nil
|
June
2025
|
Jan-23
|
400,679
|
3,568
|
(51,013)
|
(5,516)
|
347,718
|
nil
|
June
2025
|
Feb-23
|
137,132
|
-
|
-
|
(15,188)
|
121,944
|
nil
|
June
2025
|
Dec-23
|
-
|
1,647,204
|
-
|
-
|
1,647,204
|
nil
|
July
2026
|
Deferred Bonus Plan
|
6,033,013
|
1,650,772
|
(3,130,765)
|
(204,006)
|
4,349,014
|
|
|
The weighted average share price on exercise
for awards exercised during the year was £2.82 (2023: £3.32). The
weighted average share price at grant date for awards granted
during the year was £2.75 (2023: £2.98).
Under the DBP, sufficient shares to satisfy
each award are bought over the course of the vesting period and
held in an employee trust ("ESOP") until vesting. As at 29
February 2024, the ESOP held 2,303,211 ordinary shares (2023:
3,587,130). The ESOP holding is in line with expectations of
how many shares will be needed to satisfy the current awards under
this scheme. This amount is net of expected lapses in the scheme
and the fact that recipients typically forego sufficient shares in
order to satisfy the associated tax liability that arises on their
vesting.
c) Restricted Share
Plan
Details of the RSP share awards in issue and
the movements in the year are given below:
Share scheme
|
Number
at
1
March
2023
|
Granted
|
Exercised
|
Lapsed
|
Number at
29
February
2024
|
Exercisable
between
|
July 2014
|
13,750
|
-
|
(7,500)
|
-
|
6,250
|
Jul 17 -
Jul 24
|
August 2015
|
12,500
|
-
|
-
|
-
|
12,500
|
Aug 18 -
Aug 25
|
Restricted Share Plan
|
26,250
|
-
|
(7,500)
|
-
|
18,750
|
|
The weighted average share price on exercise
for awards exercised during the year was £2.71 (2023:
£3.32).
The fair value of the £nil cost options is
approximated to the share price at the time of grant less the
expected dividend to be paid during the vesting period.
The value of the awards is expensed over the
period from the date of grant to the vesting date or if used as a
recruitment incentive, from the date of joining to the vesting
date. The awards are satisfied by the issue of new
shares.
d) Long-Term Incentive Plan
("LTIP")
The Company also has LTIP awards, which allow
for the form of a conditional right to receive shares at £nil cost.
The awards normally vest over three years and are subject to
various performance conditions based on earnings per share ("EPS")
or segmental operating profit.
Details of the LTIP share awards in issue and
the movements in the year are given below:
Share scheme
|
Number
at
1
March
2023
|
Granted
|
Exercised
|
Lapsed
|
Forfeited
|
Number at
29
February
2024
|
Exercisable
between
|
LTIP 2018
|
33,294
|
-
|
-
|
-
|
-
|
33,294
|
May 23 -
Oct 28
|
LTIP 2019
|
202,853
|
-
|
-
|
-
|
(36,653)
|
166,200
|
Jul 24 -
Jul 29
|
LTIP 2020
|
375,000
|
-
|
-
|
-
|
-
|
375,000
|
Jul 25 -
Jul 30
|
LTIP 2021
|
389,379
|
-
|
-
|
-
|
(88,495)
|
300,884
|
Jun 26 -
Jun 31
|
LTIP 2022 (granted
FY23)
|
624,174
|
-
|
-
|
-
|
(78,326)
|
545,848
|
Jul 27 -
Jul 32
|
LTIP 2023
|
-
|
369,958
|
-
|
-
|
-
|
369,958
|
|
Long-Term Incentive
Plan
|
1,624,700
|
369,958
|
-
|
-
|
(203,474)
|
1,791,184
|
|
The weighted average share price at grant date
for awards granted during the year was £2.75 (2023:
£3.14).
The fair value of the LTIP 2021 award which has
a TSR-based vesting condition has been calculated using a Monte
Carlo simulation. The fair value of the other LTIPs is determined
based on the share price at the time of grant less the expected
dividend to be paid during the vesting period calculated using the
market consensus dividend yield.
The value of the awards is recognised as an
expense over the period from the date of grant to the vesting
date. The awards are satisfied by the issue of new
shares.
e) Other share-based
payments
On 5 December 2022, 253,434 shares were awarded
as a joining incentive to certain employees of Madrid Shipping
Advisors SL and on 16 December 2022, 1,016,121 shares were issued
to the former owners of Southport as part of the acquisition. In
addition, on the acquisition of Southport, a further 872,821 shares
were awarded to key employees of Southport. The fair value of the
awards is determined based on the share price at the time of grant
less the expected dividend to be paid during the three-year vesting
period calculated using the market consensus dividend
yield.
The value of the awards is recognised as an
expense over the period from the date of grant to the vesting date.
The Southport Maritime Inc. awards will be satisfied by the issue
of new shares.
Share award
|
Number
at
1
March
2023
|
Granted
|
Exercised
|
Lapsed
|
Forfeited
|
Number at
29
February
2024
|
Vesting
|
Southport Maritime Inc.
|
1,888,942
|
-
|
-
|
-
|
-
|
1,888,942
|
Dec
25
|
Madrid Shipping Advisors
SL
|
253,434
|
-
|
-
|
-
|
-
|
253,434
|
Dec 23 -
Dec 25
|
6 Share capital and other reserves
6.1 Share capital
|
Ordinary shares
|
Ordinary shares
|
|
2024
Number
|
2023
Number
|
2024
£'000
|
2023
£'000
|
c)
Authorised
|
|
|
|
|
Ordinary shares of 10 pence
each
|
34,903,000
|
34,903,000
|
3,490
|
3,490
|
|
Ordinary shares
|
Ordinary shares
|
Share
premium
|
|
2024
Number
|
2023
Number
|
2024
£'000
|
2023
£'000
|
2024
£'000
|
2023
£'000
|
d)
Issued
|
|
|
|
|
|
|
Fully paid ordinary shares of 10
pence each
|
|
|
|
|
|
|
As at start of year
|
32,924,877
|
32,200,279
|
3,292
|
3,221
|
53,796
|
53,030
|
Capital reduction
|
-
|
-
|
-
|
-
|
(53,796)
|
-
|
Shares issued and fully paid (see
below)
|
-
|
724,598
|
-
|
71
|
-
|
766
|
As at end of year
|
32,924,877
|
32,924,877
|
3,292
|
3,292
|
-
|
53,796
|
In the prior year, in connection with setting
up a broker team in Madrid, 253,434 shares were issued to certain
employees as a joining incentive; and 37,636 shares were issued to
settle part of the deferred consideration payable in respect of the
acquisition of Naves.
No shares remained unpaid at 29 February 2024
or 28 February 2023.
The Company has one class of ordinary shares
which carry no right to fixed income.
6.2 Dividends
Amounts recognised as distributions to equity
holders in the year:
|
2024
£'000
|
2023
£'000
|
Ordinary shares of 10 pence each
|
|
|
Final dividend of 8.0 pence per
share for the year ended 28 February 2023 (2023: 7.0 pence per
share)
|
2,440
|
2,018
|
Interim dividend (2023: 4.0 pence
per share)
|
-
|
1,172
|
|
2,440
|
3,190
|
The dividends paid by the Group during the year
ended 29 February 2024 totalled £2.4 million (8.0 pence per share)
relating to a final dividend in respect of the year ended 28
February 2023 paid on 9 February 2024. An interim dividend of £1.2
million (4.0 pence per share) was paid on 2 April 2024.
The right to receive dividends on the shares
held in the ESOP has been waived (see Note 6.3). The dividend
saving through the waiver is £0.2 million (2023: £0.4
million).
During the year ended 28 February 2023, the
Group paid dividends totalling £3.2 million (11.0 pence per
share), being a final dividend in respect of the year ended 28
February 2022 of £2.0 million (7.0 pence per share) paid on 14
October 2022 and an interim dividend for the year ended
28 February 2023 of £1.2 million (4.0 pence per
share) paid on 4 January 2023.
In December 2022, the Company commenced a
project to research various options for increasing the
distributable reserves available to the Company in order to support
the stated progressive dividend policy. After the payment of an
interim dividend in January 2023, the outcome of the research
identified an accounting practice of the Company used since IFRS 2
was introduced in 2005, which carried realised gains which could
only be used in very limited circumstances with the consequence
that a significant balance within retained earnings (that was not
previously identified as created by unrealised gains) was
incorrectly used by the Company in the calculation of distributable
reserves.
Dividends paid between 2016 and 2023 were
therefore paid by the Company without having sufficient
distributable reserves from which to lawfully pay them. Having
identified these issues, to rectify the gap in retained earnings
and the unlawful payment of dividends, after the Balance Sheet
date, the Company reduced its share premium account and capital
redemption reserve and capitalised and reduced £19.8 million of the
merger reserve ("Capital Reduction") and entered into releases from
liability for the benefit of shareholders and directors (to ensure
that no person was disadvantaged as a consequence of the payment of
unlawful dividends).
On 15 February 2023 the Company entered into
deeds of release in favour of shareholders receiving the unlawful
dividends and the directors of the Company at the time the unlawful
dividends were paid. These releases were conditional on various
conditions including, shareholder approval for the Capital
Reduction, the Capital Reduction becoming effective, and the terms
of the deeds of release for shareholders and directors. At a
General Meeting of the Company on 14 April 2023, shareholders
approved the Capital Reduction and the deeds of release for
shareholders and directors which allowed the Company to proceed
with the process for the Capital Reduction by seeking approval from
the High Court of Justice. On 9 May 2023 the High Court approved
and confirmed the Capital Reduction and on 5 June 2023 the Capital
Reduction became effective providing the Company with £73.9 million
of distributable reserves at that time.
For the year ended 29 February 2024, a final
ordinary dividend of 9.0 pence per share has been proposed
totalling £3.0 million.
6.3 ESOP reserve
An Employee Share Ownership Plan ("ESOP") was
established on 23 January 1995. The ESOP has been set up to
purchase shares in the Company. These shares, once purchased, are
held in trust by the Trustee of the ESOP, SG Kleinwort Hambros
Trust Company (CI) Limited, for the benefit of the employees.
Additionally, an Employee Benefit Trust ("EBT") previously run by
ACM Shipping Group plc also holds shares in the Company. The
ESOP and EBT are accounted for within the Company
accounts.
The ESOP reserve represents a deduction from
shareholders' funds and a reduction in distributable reserves. The
deduction equals the net purchase cost of the shares held in trust
by the ESOP. Shares allocated by the ESOP to satisfy share
awards issued by the Group are released at cost on a First in First
Out basis.
|
£'000
|
At 28 February 2022
|
6,771
|
Shares acquired by the
ESOP
|
7,963
|
ESOP shares allocated
|
(4,127)
|
At 28 February 2023
|
10,607
|
Shares acquired by the
ESOP
|
6,125
|
ESOP shares allocated
|
(9,592)
|
At 29 February 2024
|
7,140
|
As at 29 February 2024, the ESOP held 2,303,211
(2023: 3,579,630) ordinary shares of 10 pence each. The funding of
the purchase has been provided by the Company in the form of a gift
and the Trustees have contracted with the Company to waive the
ESOP's right to receive dividends. The fees charged by the Trustees
for the operation of the ESOP are paid by the Company and charged
to the Income Statement as they fall due.
As part of the acquisition of ACM Shipping
Group plc in July 2014, the Company issued 125,621 shares into an
Employee Benefit Trust ("EBT") previously run by ACM Shipping Group
plc. As at 29 February 2024, the EBT held 62,290 (2023: 62,290)
ordinary shares of 10 pence each.
The total cost to the Company of shares and
cash held in the ESOP and EBT at 29 February 2024 was £7.1 million
(2023: £10.6 million) including stamp duty associated with the
purchase. The shares owned by the ESOP and EBT had a market value
at 29 February 2024 of £6.3 million (2023: £10.9 million). The
distribution of these shares is determined by the Remuneration
Committee.
3,440,115 shares (2023: 1,877,473) have been
released to employees during the year. The shares acquired by
the ESOP had an aggregate cost of £6.1 million (2023: £8.0
million).
6.4 Other reserves
|
|
Capital
redemption
reserve
£'000
|
Merger
reserve
£'000
|
Foreign
currency
translation
reserve
£'000
|
Hedging
reserve
£'000
|
Total
£'000
|
At 28 February 2022
|
|
396
|
24,641
|
1,626
|
(533)
|
26,130
|
Cash flow hedges:
|
|
|
|
|
|
|
- Transfer to income
statement
|
|
-
|
-
|
-
|
4,826
|
4,826
|
- Fair value gain/losses in the
period
|
|
-
|
-
|
-
|
(4,438)
|
(4,438)
|
Investment hedge
|
|
-
|
-
|
(124)
|
-
|
(124)
|
Exchange differences
|
|
-
|
-
|
2,522
|
-
|
2,522
|
Deferred tax on items taken to
equity
|
|
-
|
-
|
-
|
(97)
|
(97)
|
At 28 February 2023
|
|
396
|
24,641
|
4,024
|
(242)
|
28,819
|
Cash flow hedges:
|
|
|
|
|
|
|
- Transfer to income
statement
|
|
-
|
-
|
-
|
(2,231)
|
(2,231)
|
- Fair value gain/losses in the
period
|
|
-
|
-
|
-
|
3,872
|
3,872
|
Investment hedge
|
|
-
|
-
|
249
|
-
|
249
|
Exchange differences
|
|
-
|
-
|
(1,783)
|
-
|
(1,783)
|
Capital reduction
|
|
(396)
|
(19,755)
|
-
|
-
|
(20,151)
|
Deferred tax on items taken to
equity
|
|
-
|
-
|
-
|
(410)
|
(410)
|
At 29 February 2024
|
|
-
|
4,886
|
2,490
|
989
|
8,365
|
The capital redemption reserve arose on
previous share buy-backs by the Company. The merger reserve arose
on transactions where the Company issued shares pursuant to an
arrangement to acquire more than a 90% interest in another company
and no share premium was recorded. The merger reserve arose
principally in 2001 in relation to the acquisitions of Braemar
Shipbrokers Limited and Braemar Tankers Limited. Further
additions have arisen in respect of Naves and Atlantic Brokers. The
amounts in the merger reserve are unrealised profits relating to
the corresponding assets acquired by the Company on the issue of
shares. These profits may become realised on the disposal or
write-down of these assets. During the year, following the Capital
Reduction (see Note 6.2), the merger reserve was reduced by £19.8
million and the capital redemption reserve was reduced to
£nil.
The hedging reserve comprises the effective
portion of the cumulative net change in fair value of cash flow
hedging instruments relating to hedged transactions that have not
yet occurred of £1.3 million asset (2023: £0.3 million liability).
The deferred tax movement recognised in equity in the year was a
loss of £410,000 (2023: £97,000 loss).
7 Other supporting notes
7.1 Provisions
Provisions are recognised when the Group has a
present obligation (legal or otherwise) as a result of a past event
and it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. If material,
the provisions are discounted using an appropriate current post-tax
interest rate.
Short-term provisions for long service leave
expected to be settled wholly within twelve months of the reporting
date are measured at the amounts expected to be paid when the
liabilities are settled.
The provision for long service leave not
expected to be settled within twelve months of the reporting date
is measured at the present value of expected future payments to be
made in respect of services provided by employees up to the
reporting date. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market
yields at the reporting date on corporate bonds with terms to
maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Key
estimate
Uncertain commission obligations
In June 2023, the board commissioned an independent
internal investigation into an historical transaction originating
in 2013. The investigation was overseen by an Investigation
Committee chaired by the Group's non-executive Chairman and was
conducted by an independent specialist forensic accounting firm,
and independent external counsel. The investigation was
comprehensive and complex and ultimately encompassed several
transactions between 2006 and 2013 which required further
investigation.
As a result of the investigation, the Group has
recognised a provision of £2.0 million in relation to the uncertain
obligations connected to a number of the transactions and
commission obligations identified as part of the investigation. Of
the £2.0 million, £1.7 million relates to an historical unsettled
commission payable which was recorded in 2017 upon completion of
the relevant contracts which originated in 2013. This balance was
reclassified from trade payables to provisions in the prior year.
During the year, £0.2 million was added to the provision following
the return of previously paid amounts connected to the uncertain
commission obligation. While the board cannot forecast with
certainty final outcomes in respect of these obligations, based on
the Group's current information, the amount recognised is the
current best estimate of the amount required to settle the
obligations at the balance sheet date, taking into account the
risks and uncertainties surrounding the obligations, including
interpretation of specific laws and likelihood of settlement.
As the ultimate potential obligations and
outcomes are uncertain in relation to the transactions subject to
the internal investigation, there remains a risk that the final
outcomes could materially impact the recognised balance within the
next or in future financial years. It is impracticable to provide
sensitivity estimates of potential downside variances at this
time.
|
|
Dilapidations
£'000
|
Uncertain commission obligation
£'000
|
Other
£'000
|
Total
£'000
|
At 28 February 2022
|
682
|
-
|
601
|
1,283
|
Reclassification
|
18
|
1,707
|
(346)
|
1,379
|
Provided in the year
|
-
|
257
|
462
|
719
|
Utilised in the year
|
-
|
-
|
(15)
|
(15)
|
Reversal of provision in the
year
|
(124)
|
-
|
-
|
(124)
|
Exchange differences
|
16
|
-
|
51
|
67
|
At 28 February 2023
|
592
|
1,964
|
753
|
3,309
|
Provided in the year
|
20
|
-
|
-
|
20
|
Provision added in year
|
-
|
209
|
-
|
209
|
Utilised in the year
|
-
|
-
|
(134)
|
(134)
|
Reversal of provision in the
year
|
-
|
-
|
(154)
|
(154)
|
Exchange differences
|
(7)
|
(79)
|
(26)
|
(112)
|
At 29 February 2024
|
605
|
2,094
|
439
|
3,138
|
Current
|
547
|
2,094
|
439
|
3,080
|
Non-current
|
58
|
-
|
-
|
58
|
At 29 February 2024
|
605
|
2,094
|
439
|
3,138
|
Dilapidations relate to future obligations to
make good certain office premises upon expiration of the lease
term. The provision is calculated with reference to the location
and square footage of the office.
Employee entitlements of £0.4 million is
included in other, which relate to statutory long service leave in
Braemar Shipbroking Pty Limited. This is based on the principle
that each Australian employee is entitled to eight weeks of leave
over and above any annual leave on completion of ten years'
continuous service. The provision is calculated with reference to
the number of employees who have at least seven years of continuous
service.
7.2 Contingent liabilities
From time to time the Group may be engaged in
litigation in the ordinary course of business. The Group carries
professional indemnity insurance. There are currently no
liabilities expected to have a material adverse financial impact on
the Group's consolidated results or net assets.
7.3 Events after the reporting
date
The Company paid an interim dividend of £1.2
million (4p per share) on 2 April 2024. There were no other
adjusting or significant non-adjusting events between the reporting
date and the date these Financial Statements were
authorised.
Five-year financial summary
(unaudited)
Consolidated Income Statement
Continuing operations
|
12 months to
29 Feb 2024
£'000
|
12
months to
28 Feb 2023
£'000
|
12
months to
28 Feb
2022
£'000
|
12
months to
28 Feb
2021
£'000
|
12
months to
29
Feb2020
£'000
|
Group revenue
|
152,751
|
152,911
|
101,310
|
83,695
|
117,655
|
|
|
|
|
|
|
Other operating
expenses
|
(136,203)
|
(132,836)
|
(91,250)
|
(75,976)
|
(106,625)
|
Specific items (net)
|
(7,504)
|
(8,406)
|
(514)
|
(1,097)
|
(3,344)
|
Total operating
expenses
|
(143,707)
|
(141,242)
|
(91,764)
|
(77,073)
|
(109,969)
|
Operating profit/(loss)
|
9,044
|
11,669
|
9,546
|
6,622
|
7,686
|
Gain on revaluation of
investment
|
-
|
-
|
172
|
-
|
-
|
Net interest expense
|
(1,533)
|
(2,195)
|
(1,156)
|
(1,486)
|
(1,853)
|
Share of associate profit for the
period
|
12
|
(23)
|
(19)
|
-
|
436
|
Profit before taxation
|
7,523
|
9,451
|
8,543
|
5,136
|
6,269
|
Taxation
|
(2,899)
|
(4,855)
|
(1,839)
|
(1,574)
|
46
|
Gain/(loss) for the year from
discontinued operations
|
-
|
-
|
7,215
|
970
|
(2,299)
|
Profit/(loss) after
taxation
|
4,624
|
4,596
|
13,919
|
4,532
|
4,016
|
|
|
|
|
|
|
Dividends
|
|
|
|
|
|
Interim
|
1,222
|
1,172
|
610
|
-
|
1,564
|
Final proposed
|
2,963
|
2,440
|
2,254
|
1,495
|
-
|
|
4,185
|
3,612
|
2,864
|
1,495
|
1,564
|
|
|
|
|
|
|
Earnings per ordinary share -
pence
|
|
|
|
|
|
Basic - underlying from continuing
operations
|
36.62p
|
46.22p
|
23.06p
|
15.60p
|
29.45p
|
Diluted - underlying from
continuing operations
|
29.96p
|
38.52p
|
18.79p
|
12.91p
|
26.62p
|
Five-year financial summary
(unaudited)
Consolidated Balance Sheet
|
As at
29 Feb 2024
£'000
|
As
at
28 Feb 2023
£'000
|
As
at
28 Feb
2022
£'000
(restated)
|
As
at
28 Feb
2021
£'000
(restated)
|
As
at
29 Feb
2020
£'000
(restated)
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
71,337
|
71,407
|
79,891
|
83,955
|
83,812
|
Other intangible assets
|
3,185
|
3,980
|
997
|
2,129
|
2,411
|
Property, plant and
equipment
|
5,582
|
5,320
|
7,078
|
9,841
|
11,928
|
Other investments
|
1,633
|
1,780
|
1,780
|
1,962
|
1,962
|
Investment in associate
|
713
|
701
|
724
|
3,763
|
7,315
|
Financial assets
|
-
|
-
|
-
|
-
|
1,184
|
Derivative financial
instruments
|
249
|
30
|
8
|
200
|
-
|
Deferred tax assets
|
2,979
|
4,794
|
3,713
|
2,900
|
3,620
|
Pension surplus
|
1,414
|
1,120
|
-
|
-
|
-
|
Other long-term
receivables
|
4,589
|
8,554
|
5,636
|
1,888
|
2,467
|
|
91,681
|
97,686
|
99,827
|
106,638
|
114,699
|
Current assets
|
|
|
|
|
|
Trade and other
receivables
|
37,730
|
43,323
|
35,792
|
33,416
|
39,541
|
Financial assets
|
-
|
-
|
-
|
746
|
-
|
Derivative financial
instruments
|
1,287
|
1,224
|
54
|
1,573
|
-
|
Current tax receivable
|
2,925
|
973
|
-
|
-
|
-
|
Assets held for sale
|
-
|
-
|
-
|
436
|
-
|
Cash and cash
equivalents
|
27,951
|
34,735
|
13,964
|
14,111
|
28,749
|
|
69,893
|
80,255
|
49,810
|
50,282
|
68,290
|
Total assets
|
161,574
|
177,941
|
149,637
|
156,920
|
182,989
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Derivative financial
instruments
|
175
|
1,122
|
688
|
-
|
437
|
Trade and other
payables
|
43,611
|
57,310
|
39,183
|
47,833
|
47,209
|
Short-term borrowings
|
-
|
-
|
-
|
-
|
25,116
|
Current tax payable
|
1,625
|
4,141
|
1,608
|
1,318
|
1,334
|
Provisions
|
3,080
|
2,575
|
486
|
307
|
201
|
Convertible loan notes
|
632
|
699
|
1,416
|
4,461
|
4,444
|
Deferred consideration
|
-
|
-
|
-
|
-
|
177
|
Liabilities directly associated
with assets classified as held for sale
|
-
|
-
|
-
|
125
|
-
|
|
49,123
|
65,847
|
43,381
|
54,044
|
78,918
|
Non-current liabilities
|
|
|
|
|
|
Long-term borrowings
|
29,819
|
29,919
|
28,331
|
31,634
|
34,585
|
Deferred tax
liabilities
|
8
|
344
|
-
|
174
|
903
|
Derivative financial
instruments
|
183
|
1,022
|
335
|
56
|
4
|
Trade and other
payables
|
58
|
542
|
-
|
-
|
-
|
Provisions
|
416
|
734
|
797
|
690
|
765
|
Convertible loan notes
|
2,346
|
2,852
|
2,755
|
2,681
|
2,639
|
Deferred consideration
|
-
|
-
|
495
|
882
|
2,293
|
Pension deficit
|
-
|
-
|
2,052
|
3,819
|
3,672
|
|
32,830
|
35,413
|
34,765
|
39,936
|
44,861
|
Total liabilities
|
81,953
|
101,260
|
78,146
|
93,980
|
123,779
|
Total assets less total liabilities
|
79,621
|
76,681
|
71,491
|
62,940
|
59,210
|
Equity
|
|
|
|
|
|
Share capital
|
3,292
|
3,292
|
3,221
|
3,174
|
3,167
|
Share premium
|
-
|
53,796
|
53,030
|
52,510
|
52,510
|
ESOP reserve
|
(7,140)
|
(10,607)
|
(6,771)
|
(1,362)
|
(2,498)
|
Other reserves
|
8,365
|
28,819
|
26,130
|
27,100
|
25,862
|
Retained earnings
|
75,104
|
1,381
|
(4,119)
|
(18,482)
|
(19,831)
|
Total equity
|
79,621
|
76,681
|
71,491
|
62,940
|
59,210
|
Contact information
Registered office
Braemar Plc
One Strand
Trafalgar Square
London
WC2N 5HR
Company number:
02286034
Telephone: +44 (0)20 3142
4100
Web address:
www.braemar.com
Principal offices
Shipbroking
One Strand
Trafalgar Square
London
WC2N 5HR
80 Robinson Road
#24-01/02
Singapore
068898
Level 3, 70 City Road
South Bank
Melbourne
Victoria 3006
Australia
Corporate Finance
Domstraße 17
20095 Hamburg
Germany
One Strand
Trafalgar Square
London
WC2N 5HR
www.braemar.com