Braemar PLC on Wednesday reported a sharp drop in half-year profit amid increased costs and weakening rates in some sectors.

The London-based shipbroker and advisor in shipping investment said in the six months to August 31, pretax profit dived to £1.9 million from £10.1 million a year prior. Revenue grew 7.9% to £74.9 million from £69.4 million.

However, costs increased. The company paid £4.4 million in tax, doubled from £2.2 million. Interests paid nearly quadrupled to £1.2 million from £305,000. Further, it reported a £8.9 million decrease in payables, swung from an increase of £4.6 million a year prior. Share scheme charges meanwhile more than doubled to £3.8 million from £1.8 million.

Chief Executive Officer James Gundy said: ‘The investment we have made in acquisitions and new teams has more than offset the weakening rates experienced in some of our sectors, allowing us to achieve revenue growth of 8% against the same period last year. This proves that our strategy of focusing on shipbroking, moving into new geographies and growing our highly complementary securities business is delivering a more diversified and resilient business.’

Despite the profit fall, it maintained its 4.0 pence per share interim dividend.

Looking ahead, Braemar said market conditions are healthy in the company’s core sectors shipping and energy. It haled its ‘strong’ order book which stood at $65.6 million as at October 31, up 17% from $56.2 million at the end of February.

‘The group has continued to trade well in H2 FY24 and remains on course to meet market expectations for FY24 and the board views the future with confidence,’ the company said.

It clarified that the market expectation consensus for financial 2024 ending in late February was revenue of £150.4 million, which would be down 1.6% from £152.9 million in financial 2023. Further, it said market consensus for underlying operating profit before acquisition-related expenditure was £18 million for financial 2024, similar to financial 2023’s £18.1 million.

Braemar shares fell 2.4% to 282.99 pence each on Wednesday afternoon in London.

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