Braemar Plc (BMS) Earnings Call Transcript & Summary

Good afternoon, everybody, and welcome to the FY '24 results. My name is James Gundy, CEO of the company. On my left, Grant is our CFO; and Tris is our COO. Just for those who don't know about the management of the company, I think it's important to familiarize you with how we are and who we are. I've been in business for near 40 years, starting my career in Clarksons as a young broker, served there 10 years, they moved to ACM. With progress of the latter, we eventually IPO-ed that business. I became COO and then CEO. In 2014, we were acquired by Braemar. It became a reverse management takeover. On the Shipbroking side, I became CEO, built that further and came into the group in 2021 as the CEO of the whole group. I'm still very much an active ship broker myself. Grant?

My name is Grant Foley. I'm the Group CFO. I joined the business last August and spent most of my career in financial services, in particularly various brokers. Previous to [indiscernible] backed businesses as well as public, and I was Group CFO and COO for CMC Markets, which is [ 52-50 ] business.

Good afternoon. I'm Tris Simmonds, the Chief Operating Officer. I have a slightly different experience to James in that my background is in energy and commodities. However, James and I's careers, we've crossed a number of times over the years. We actually started our first business together in 2001, which is still here today, which is a joint venture with JFI. I started my own business in 2013, which we subsequently sold to Braemar. James and I had a vision of growing the securities business within Braemar ACM, which we've done. And we'll talk about that a little bit later, but that's very much sort of my experience within the group.

I have a business update. Here we go then. First of all, I want to say thank you to Grant for helping us getting our accounts and his finance team getting our accounts out early this year, earlier than anticipated, especially compared to the last couple of years. So just to go through the various sectors here, you can see that the revenue is in line with basically where we were last year. But please don't forget where we were 2 years ago in FY '22 when we were at GBP 101.4 million. So theoretically, for me, this is great to be able to sit here and say we've maintained where we were the previous year. Underlying operating profit, yes, is slightly down from where we were in '23, but significantly higher to where we were in '22. But at the same time, we've had some headwinds, as you say, with the FX, for example, going against [indiscernible] one of the main sectors of our business, dry cargo, having more of a difficult time. It also proves the fact we've been resilient with our other business that we've taken on board and grown that have enabled us to maintain our numbers. The net cash, yes, it's GBP 1 million of positive, slightly down from the previous year. But do remember, we've obviously invested our money into new businesses, but at the same time, significantly different to where we were 2, 3 years ago. 8% growth. Now, when we say 8% growth in total fixtures and transactions, it means we're obviously growing the business. As we can't necessarily dictate where the markets are going or what they're doing, as you know, we don't take any risk on [ the axis ], but the fact is we could show that we are increasing our volume within the business. On the forward order book, now, for those who don't understand, this is a business where we book forward income. It can go out as late as 2039. So you can see where we were at GBP 6.2 million a year ago. We're now pulling in GBP 82.6 million. That's significantly higher as far as the forward book for us. Now, as on the dividends, we're saying 13p, but the most important factor in that square is the fact that we're saying progressive dividend policy. Now, our business, for those who don't understand or know ship broking, we've broken it down to 3 sectors: the chartering side of the business, which is what we would call the cash flow, continuous turnaround business income, the biggest sector part of the business in the new building sectors, S&P, offshore and the recycling business. That's -- and the finance team as our corporate finance, that takes -- there's longer, lumpier deals. And then we had the risk advisers, which is security business, which Tris will tell you more about. That business we've grown in the last 2 or 3 years. As you can see, the revenues have grown on those sectors, charging up to GBP 104 million, and obviously investment, GBP 26 million, and risk advisory, GBP 23 million. Building resilience in the business, this explains us a bit from where we were in 2014 when Braemar acquired ACM, and I came in as the Shipbroking CEO. So if you look back, in 2014, Shipbrokers was making GBP 41 million. You can see today, we're making GBP 153 million, proven we're paving the right policy strategy for the business. In 2018, Tris mentioned that we acquired Atlantic, and we've grown that business, as you'll see later on, to some [ $35 million ] revenue. And move on to '21, when I came in, we were at GBP 84 million but we simplified the business and I straightaway came in and wanted to reduce the debt of business and continue to brand the business, which we've done. I can say now, in 2024, we have an integral platform that we can continue growing, whether that be organic or small M&A deals for our business as well. Okay, investment case, I think, from the management team within Braemar, we have a clear growth strategy, exactly how we want to hire, whether that be individual hires, small M&A deals or through our organic growth of our graduate scheme. We believe that, with positive market drivers, global trade continues to increase. Ship supply remains constrained. We, once again, as Braemar, are basically covering all those sectors as we're taking full advantage of that with faster scale of business with 400 -- over 16, moving towards almost 17 offices now to cover our various clients around the globe and making sure that those offices are permanently interlinking. As to the dividend, I mentioned earlier that's up 8% from the prior year, and it's still very much a progressive dividend policy for the company. Now I'm going to pass you across to Tris to give you a bit more update on the growth strategy.

Thanks, James. So we have a very clear growth strategy that we employ, and we basically break it down into 3 means. James talked a little bit about organic expansion, which can not only be increasing brokers per desk, but also expanding our geographic expansion and adding new products to existing desks. And obviously, in the previous year, we were fairly active on some acquisitions. And then finally, market growth, which is essentially us looking to increase our market share, that can be using the 2 previous methods of expansion. I think it's important to talk about our ability of delivering this growth. And so a few sort of key numbers to go along with these methods of expanding, so in FY '22, '23, we delivered a total of 30 new brokers, all with new revenue streams. That brought in an additional $30 million worth of revenue for the financial year that we're talking about now. And James mentioned earlier on all of those businesses that we acquired or new desks that we brought in have seen the synergies that have been part of a wider group. And for a number of them, they have actually had record years versus what they're able to achieve either as independents or working as a desk within another business. We're not going to do deals for the sake of doing deals or adding broker numbers. We have a very measured approach in how we want to expand. In the last 12 months, we've looked at a lot of businesses, and we probably walked away from them because we feel that they're maybe somewhat opaque in their numbers, et cetera. So we're not just going to do deals for the sake of doing deals. So this slide here, some of you may have seen it before, but it really was used to identify growth opportunities in products and geographically. And just sort of giving you a little bit more detail on, let's say, some of the movements in the last 24 months, if you look at the Americas, that was an area that we decided 2 years ago that we wanted to establish a good footprint. We did that with the acquisition of Southport. Southport's predominantly a tanker broker. But very much, we have aspirations as to the team at Southport to expand into the other products, which were already brokered within Braemar, which you can see a number of those circles there. We're not broking at all in the Americas, whether that's dry cargo, securities, et cetera. It would be very much on our list of things to do. Likewise, the acquisition of Madrid Shipping Advisors, we had an office in Geneva on tankers, but we felt that we needed to have a bigger presence in Europe. The addition of Madrid Shipping Advisors has opened up a lot of the Med refiners that we were struggling to make headway with. And likewise, additions of new products into that sector now the office is open is something that we aspire to do. Just a few sort of key boxes here, which we'll expand on them, securities very much seeing regulation become tighter for all of the products that we trade. I think a lot of our competitors are feeling that squeeze as well. And for that reason, we want to extend our licenses so that we can add new products to the existing desks that we have here. We very much feel [ the bust ] has been driven by our customers. We know what products they want to trade. They may be trading them with some of the larger interdealer brokers. But we do feel that we've reached that scale now, particularly with the addition of the nat gas desk, that we can start extending that reach into those products. And to do that, we need to have wider remits on our licenses. Likewise, a little section there about expanding into Singapore. We've just changed our commissions in our Singapore office so that we can add more products. And then moving further along towards the bottom here, you see there's a note here about the new career office, which is literally fresh off the press. We opened 2 weeks ago. James and other people are involved in new build instead of purchase. Korea has become an ever more important area for us to do business and a lot of our brokers are spending time there, particularly [indiscernible] talking to the yards in Korea, and we have brokers that will be located there fairly immediately from now on. So moving on to our people, you've got some key numbers here, which I think the important thing is not just acquiring or having more brokers. We see the need for the investment in the resource that supports our broking team. It's becoming a ever more complicated landscape for ship brokers. Shipbroking was traditionally a very unregulated industry. That's not the case now. Although the regulator isn't necessarily bearing down on the unregulated business, the chartering desks, et cetera, pressures from other organizations, particularly in the complicated environment that we're dealing with, sanctions, et cetera, we're investing in greater compliance teams, more legal support. And from where the business was 5 years ago to where it is now, we've probably quadrupled the size of support that we have for those kind of matters within the business. So we want to ensure that we have the best resources to support our front office. We must remember that people are our business. And we must assure that not only are our clients receiving the best service, but our team want to be long-serving colleagues. For that reason, we want to offer a clear progression and to always be competitive in how we reward our employees. An interesting stat is our current employees now own over 20% of issued share capital in our business with most choosing to maintain and build their equity stake. So that's a fairly constant number which we see as a positive. I'd say, on a final note here, as a management team, we must facilitate clear paths of succession and empower all of our colleagues to use their initiative and help reach all of their full potential within Braemar. Thank you.

I'll hand you over to Grant now.

Thanks, Tris. So just moving on to our financial performance and, firstly, starting with the income statement, revenue of GBP 152.8 million was in line with the prior year with strong performances from the recent acquisitions and the securities business offsetting weaker Dry Cargo revenues, which were driven by rates as well as lower activity in our investment advisory segment. Operating expenses of GBP 134 million was slightly up on the previous year with lower staff costs being offset by a foreign exchange swing, which we'll talk about later. Underlying operating profit before acquisition-related expenditure was GBP 18.1 million, which is in line with market expectations. The acquisition-related items relate to the Madrid tanker desk that we acquired at the end of 2022. Reported underlying profit was GBP 16.5 million, 18% lower than the prior year due to the increased operating costs and acquisition-related expenditure. Statutory profit before tax of GBP 7.5 million was GBP 2 million lower than the previous year, and this was due to lower operating profit being offset by specific items than we had in the previous year. Underlying earnings per share was 36.22p, 21% lower than the previous year. And total dividends for the year, as we already said, 13p, an increase of 80% from the previous year and in line with our progressive dividend policy. So looking at the revenue mix, the group has delivered balanced and diversified revenues by segment and by region. If we start on the left, tankers performed strongly, driven by our acquisitions, offsetting weaker Dry Cargo revenues. And securities continues to grow and is an increasing percentage of overall group revenues, now at 15%. On the right, looking at the split by region, you can see the contribution from the U.S.A. has grown significantly due to the acquisition of Southport Maritime, whilst APAC has fallen due to lower Dry Cargo revenues. The U.K. has remained steady at 53%. So despite mixed market conditions, we can see that there is increasing resilience coming through across the business, sustaining our revenues year-on-year. Looking at Chartering, overall revenues grew by GBP 5 million to GBP 104 million, with tankers, specialized tankers and offshore all growing and offsetting lower Dry Cargo revenues. In Investment Advisory, fewer sale and purchase transactions and corporate finance activity, which is typically more lumpy revenue in that segment, was offset by a strong performance in Risk Advisory, which is our securities business. Just coming back to sale and purchase, we start this current financial year in a very strong position with our forward order book at $41.5 million just for sale and purchase. That's $24 million higher than a year earlier. So if we move on and look at Chartering in a little bit more detail, in the prior year, revenues were GBP 99 million. In FY '24, the number of fixtures -- that's the number of transactions that we arrange for our clients -- grew by 8%, and that was primarily driven by the acquisitions that we made. Those increased fixtures increased revenue by GBP 11 million. Now, this is offset by lower rates, reducing revenues by a net GBP 6 million. And within this, Dry Cargo accounted for GBP 12 million with rates being around 35% lower than the previous year. This was offset by improving rates in Specialized Tankers and Offshore. Looking at operating expenses, over 1% higher than the previous year at GBP 134 million. Overall staff costs were GBP 2.8 million lower with a lower bonus charge partially offset by the increased headcount [ which ] invested into the business. This increased headcount drove higher travel and entertainment costs, whilst IT and Property also increased as we continue to invest and increase the size of the group. In addition, the positive GBP 1.5 million foreign exchange translation gain that we had in the prior year had a GBP 1.1 million loss this year. That led to a GBP 2.6 million swing to take us to GBP 134 million. Then moving on to liquidity, the group continued to maintain a positive net cash balance as GBP 1 million is lower than the GBP 6.9 million that we reported a year earlier due to a number of movements, including the investigation costs that we talked about at the half year and some other items in there, which was GBP 3 million, the payment of some tax on account, GBP 1.5 million, and we paid some bonuses before the year-end, which was a further GBP 2 million. So that's the movement now. In addition to the group's GBP 30 million revolving credit facility, the group has a further GBP 10 million accordion and continues to have significant headroom against covenant requirements. So finally, on our key performance indicators, revenue is unchanged from the prior year, although the mix is quite different, demonstrating the increasing resilience across the business. Revenue per head, and to be clear, this is total heads, so this includes everyone in the business, that remains very strong at GBP 373,000. That's 6% lower than the previous year, reflecting the increased head count. The underlying operating profit margin remains strong at 12%, slightly down on the prior period. However, if you adjust for the foreign exchange we just talked about, it's 12% for both years. Forward order book has grown significantly at $82.6 million, which is an increase of 47% from the previous year. And that's really driven by growth in sale and purchase and new build orders that are coming through. As I mentioned, net cash remains positive, up GBP 1 million. And we expect to see our cash position improve in the years going forward. Our total dividends, at 13p, is an increase of 8%. As I already said, that's in line with our progressive dividend policy. Thank you. I'll now hand back to James for a more clear outlook.

Thanks, Grant. Okay. I'm hoping you understand a little bit about the business. You'll understand, but here are some little graphs here that make it easier for you. As you can see, the global fleet of shipping has obviously increased over the last 20-odd years. I'm trying to say to you and emphasize to you that we are involved in all of those markets. By simplifying our business, we've obviously expanded and we will continue to expand. This means we will take advantage of that ever-increasing fleet, which allows us to do more transactions. And as you can see from previous slides, our transactions are up some 8%. The overall fleet is aging. And you can see there that [indiscernible] 15 years aged vessels, which will obviously mean there's going to be increase in new building orders, which we will take advantage of as well. And as I think [indiscernible] shrinks, we can see the other side of the equation, which is the freight rates increasing, which -- where they are presently, which allows us to revenue increase on the back of higher commissions. Just a little guidance from my side on the rates, you'll see there that we put together a Braemar Index. First of all, I want to emphasize to you, my being in the business for so many years, some almost 40 years in this business, I, for the first time, do ask me questions about my gut feeling about the industry and the market rates going forward. And actually, I've never seen so many things aligned at one time where I could see shipping rates maintaining a strength. And when the rates fall down slightly, we potentially see a buffer there. Even with Dry Cargo rates falling off a year ago, we still see the futures market being positive going forward, which is a key factor. So going back to the Braemar Index, you can see that all fleets -- and we put that together, a graph, to show you where the freight rates are. You can see, yes, it's come off from where it was in 2022. We had a lot to do with what was going on with the [ opening ] situation with Russia, Ukraine. It's come back down, but still significantly higher [ than ] where it was some 6, 7 years ago. Tanker rates have maintained themselves. But as you can see, the Dry Cargo rates, as I've mentioned to you, both futures markets, which we're very much heavily involved in, are giving positive singles going forward. So as a summary, now, for me, as CEO, this year is almost significantly better than last year because we've maintained our numbers. And please remember where we were 2 years ago with half the profit, and this is now a far more simplified business. Fixture numbers, as I mentioned, sure, up 8%. Acquisitions have definitely performed exceptionally well, but I want to emphasize that those businesses that we've acquired are actually doing better themselves by being part of the bigger group. We've maintained a net cash position, which is important. And please remember where we were 2, 3 years ago when I came in. And dividend policy, as we're all saying, is up 8% to 13p. Now, the outlook for the shipping industry remains very strong, and I emphasize that even as my gut feeling. The forward order book, which is important for us managers because it enables us to budget going forward, knowing that we've got income coming to the door from day 1, and we go out to the late 2039. I think it is 25 [ % ] so far this year, the first 2, 3 months of the year, we were in line with expectations, so we're pleased with that. And the fragmented markets that present opportunities for further growth, this meaning the fact that we're seeing smaller consolidated stories, the cost for the smaller business to maintain with compliance, KYCs, we enable that to make it more attractive to smaller business to grow and for us to acquire, whether that be singular highs, desk highs or business acquisitions. And as we said earlier, again, I'll reemphasize the business is well placed to support further growth, which is important because Grant and his team are putting together and Tris are making sure that we can acquire this business and we can deliver that, be it IT structure, finance teams, our support groups. So -- and of course, we are now in 17 countries and offices around the world. So thank you. So yes, so we're open to any Q&A. We have -- if you've got some questions for us, we'd love to answer them as well. So handing it back.

International trade seems to be getting increasingly complex. Do you see this as a long-term benefit to Braemar?

Yes. I think I'll try to answer that. And we want to very much come across that we're not brokers on profiteering with -- on the back of what the -- what's going on in the world today, and some of those are monstrosities. But the fact is I see the business becoming more complex. The fleet is aging, which is going to need to be going through transitions of alternative fuels. There's so many different things where we have to advise our clients on what they can and where they should sort of focus on. And I see the freight rates rising in most sectors. And for that, obviously, that obviously enables us to grow our business. And as I mentioned to you earlier, just to double on top of that question, we see consolidation, which we're obviously attracting that.

I'll add to that as well. There's obviously a sanctions regime in place as well, and that's quite complicated, but we've made the investment into our compliance and infrastructure teams to make sure that we can work with our clients and navigate our way through that as well.

And a couple of questions on the dividend. Can we expect the progressive dividend policy to continue? And when will the final dividend be paid?

Look, we've got -- we've said that we have a progressive dividend policy. So you've seen it went from 9p in '22 to 12p and '23, which was a 33% increase. And now we've put it up 8% to 13p for this year. So we have got that progressive dividend policy in place, which we'll continue to follow. But we also want to continue to grow the business as well and make investments. But yes, we will be maintaining that progressive dividend policy going forward. Looking at the dividend payment date, the record date is disclosed [indiscernible] accounts is available on the website, and you'll see the details within that. The record dated is the 2nd of August, payment date the month of September.

And your EBIT margins are some 3% lower than Clarksons. Do you have plans to improve the EBIT margins?

I think it's fair to say that we talked a lot about growth here and a platform. So I'm going to just start with the platform, as James just said, we've made the investment in the infrastructure of finance, IT, compliance, HR to support the business. And we're at a scale and that platform has been established now where we can continue to bring [indiscernible] individual brokers, teams, acquisitions where we can bring those into the business without significantly increasing the support and infrastructure cost base. And that's when you're going to start to see operating margins improve. And what -- and Clarksons has more scale than us. And that's why you see that higher margin. So we're definitely aiming towards that. We haven't got any targets on what that margin will move to. But if you can continue to bring stuff in to drive the top line and have that platform in place, you will see incremental improvement in leverage, operational leverage.

And another related question, do you have a view why the market is giving Braemar a lower rating than Clarksons?

I think there's been some legacy issues in the business, if [ I can be ] open. I feel, prior to me coming in, that there was potentially a different sort of business. Now we've made it simplified. We had some issues last year which we had to overcome. And as I said before, I want to thank Grant for helping there. I think Tris and I've got a clear vision now going forward. So I [indiscernible] not because of what's happened. And I'd like to say to you now there's a complete new management, whether that's from the execs to the nonexecs. We're all aligned on where we are. And of course, we're going to push to improve on ratings from that. That's all I can say.

And there is a question about the share suspension during 2023 over a relatively small GBP 3 million inquiry. Could you just give a little bit of color on what that was all about?

Yes. There's only a certain amount we can say. There's quite a bit of disclosure in getting our annual report and accounts from '23 and the ones that are on the website for '24 now. There were -- it was around some historic transactions. FRP come in as forensic accountants to do a full and thorough review and it ultimately focused on a handful of transactions between 2006 and 2013, around a payable that we had on our balance sheet. The outcome of that was that balance was reclassified from a trade payable to a provision, which we've maintained on our balance sheet. There's a bit more disclosure within the financial statements on that.

And can you tell us the size of the global shipbroking market and what Braemar's market share is?

It's a very difficult question to answer because there's still many small ship brokers across the globe, so it's quite hard to exactly understand. Plus, you know some of these old companies are doing business themselves under their own transaction, their own -- some of their own time charter ships. And it's just -- it's difficult to say. What I can say is that Braemar is in a strong place and covers all sectors. I think you need to understand that there's huge growth opportunity for our business where we can. Where we are in the cycle of the ship brokers, if you'd like to say, we could be #1 in some sectors, #5 in other sectors, maybe slightly less. But the most important thing is we are holding ourselves from the leading ship brokers and obviously, 1 of only 2 public companies in the marketplace om what I would say is a -- very evolving business tools, the regulatory side of this business, bearing in mind we are in compliance in KYCs, et cetera. And the clients are probably dictating more and more that they want this full transparency to make sure that they're being protected with a broker that has this all in place. Anything to add to that, Tris, at all? What would you say?

Yes. No, I'd just confirm what James said. I mean, as 1 of only 2 listed ship brokers, it's very hard to quantify how much business is actually being done out there. I think, from my perspective, some of the acquisitions that we've looked at, there's a lot of opaqueness in the ownership and number of transactions that have been done in some of the privately-owned or partnership broking businesses out there, which I think that puts us in a fairly unique position because we have that clarity as a public-listed company that we can be perhaps a more attractive target for people to join moving forward.

So I think it's important to emphasize, and we probably talked about it, which are fixture numbers through the acquisitions that we made grew 8% last year. So we are -- I think seaborne trade is estimated to have grown 2%. We increased fixtures by 8%.

On the order book, is it possible to indicate what the 1-year forward order book is now compared to last year? And is the margin on the order book generally stable?

Yes. So again, it's disclosing sterling within the annual report and accounts, but if you look at it in dollars, because we've talked on us thus far, the amount in the order book that's coming through in the next 12 months is $38 million, which is about $10 million higher than it was a year earlier. And the margins on that are pretty stable, yes.

And there's a lot of cause for optimism in your outlook, for example, the increase in this forward order book. So why is the [ Cavendish ] forecast revenue for full year '25 flat? Is this unduly conservative?

Well, I think I've answered that question. First and foremost, I think, if you go back to 2 years ago, I mean the Dry Cargo revenue is off some 30%, 35%, so compared to where it was 2 years ago. So what we're trying to say, emphasize [ and get across ] to everyone, that we're able to still budget and forecast on our numbers with a huge swing in one of our largest departments because of our growing elsewhere or because of our forward order book. So we -- it's obviously co- it's to say it's difficult for us to necessarily give because the rates swing around. But we're trying to make the business slightly more immune to have -- to be able to put those sectors -- cover the downfall. So that's probably why -- that's exactly one of the reasons why we're staying flat, because we haven't seen the Dry Cargo rates come back yet to where they were. Have you got anything to add to that?

Yes. I mean the only thing I would say is that we mentioned about the new businesses that we brought in last year and how they enable us, year-on-year, to deliver the same revenue despite those lower Dry Cargo rates. I think that we have to be somewhat conservative because we don't know what rates are going to do and given the volatility that's been in Dry Cargo. But it wouldn't be unthinkable for stars to align and for Dry Cargo rates to improve considerably. But we wouldn't want to make too big a prediction on that.

Yes, but I think importantly, I come back to the point you made [indiscernible] fixture numbers are up 8%. Our Securities business is continuing to grow and become a more significant part. But we think, given that we don't know where rates are going to go, Dry Cargo is likely to be stable at the moment.

Yes.

It's right to hold the numbers where they are.

But understand where we were 2 years ago, in a larger business, making [ GBP ] 8 million, [ GBP ] 9 million. So we still have to maintain that as well. So.

Just to that point, it does -- is in the presentation, but I just want to really emphasize that point as well. I just want to talk about our revenues. We talk a lot about our Securities business. It's really important that everyone understands on the call, we do not take balance sheet risk. We are an agency-only broker. So when we talk about how we help people hedge, we're not sitting on any of that risk. We are purely a broker, and we just generate commissions, just to be clear from a balance sheet perspective.

And regarding the shareholder register, do you have an industry relationship with [ Minute Invest ] and Lightship, who have each recently declared 3% holdings in Braemar? And is there any significance to them taking a stake in the business?

I'll start with that. No, I mean, you know that one is a client, is a [indiscernible] [ department ] on the container side. Another one is a [ trillion ] competitor. We know the competitors, obviously, [indiscernible] to disclose the amount, the percentage they acquired, shares they acquired. We spoke and they much said that we're impressed with the way we've restructured the business, and they feel it's undervalued. And that's why -- the reason they're buying into it. And that is a business that is only basically their main sector, if not all their sectors, dry cargo. So they felt they were diversifying by buying into a business that was covering all of the markets.

So Lightship is a competitor and [ are making ] investments, are a client, just to be clear.

And where does Braemar earn better margins, on new buildings, S&P or chartering?

They're broadly very similar. Just so, from a revenue perspective, if you start there, you typically charge 1.25% on the charter revenue. S&P is around about 1%. Corporate finance, of course, is dependent upon the size of the deal, but is by far the biggest piece there. In the Risk Advisory, it's commissioned per lot, typically. So if you look in -- again, in the operating profit notes in the financial statement, you see that the margins are pretty similar across the piece.

But I also want to emphasize the fact there is a lot of cross-fertilization between different desks. They're talking to -- all the long floor here at Braemar in London and across also all the long floors across the other offices around the world. They interlink. They talk to each other. And as one market's moved, the other one is following or vice versa. And the S&P is very much a transition. So we obviously believe that by being -- by the -- the brokers have an advantage by picking within Braemar because they're seeing information from all the various markets because they're able to pass across to their clients.

And at this stage, a final question. The macroeconomic conditions are really playing into your favor. Do you expect that to continue?

It's difficult to say. Of course, we have no crystal ball here. But what we can see is that there's a physical unrest. It doesn't seem to go away. If you were to take any kind of analyst chart for 20, 30 years, normally, we see markets move, not necessarily on the back of the analyst prediction, but normally because of what happens in the world, as we're seeing today, whether that be an act of God or whether that be just fiscal issues. So yes, I think, at the moment, I think we're all feeling that it's probably a little unstable there, which is obviously -- which obviously helps in shipping, to some extent.

And the key thing is really we're building this resilience within the business as well and sustainable revenues and profits. That's really been a big focus, to ensure we're well set for different market conditions.

Thank you very much indeed. And that's the end of questions. James, do you have any closing remarks?

Thank you all for taking time to listen to the 2024 results. Obviously, once again, I want to say thank you to Grant for getting our results out on time, early. I think we feel that -- and to Tris as well for the fact that we've paid down some of those new acquisitions that are definitely enhancing across the globe. And I feel, for me, it's a lot easier to present the results going forward from where we were to where we are today because the business feels so much more simplified, and we understand that business inside out. But thank you for taking your time. We really appreciate it.