It told the City after several tough years there is nowsome degree of optimism a cyclical recovery is underway in some shippingmarkets.

The positive comments come as the London-listedshipbroker reported a pre-tax profit of £4.3m ($6.92m) for the six months to 31August, down from £5.2m at the same stage last year.

James Kidwell, chief executive of Braemar, explains afairer comparison can be made if income of £1.8m from the Rena project is not counted. This leaveslike-for-like pre-tax profit up a fraction from £3.4m to £3.5m.

Shipbroking contributed operating profit of £1.1m in thefirst half, down from £2.96m a year ago.

“At the end of the first half of theyear we saw some encouraging activity, culminating in a boost to our forwardbook of business from in excess of 30 newbuilding and resale contracts securedby our sale and purchase and offshore departments,” Braemar said.

“Revenue from sale and purchasebusiness was lower in the first half of the year compared to last year,predominantly because of a lower newbuilding forward book.

“However, new investment in themarket has favoured newbuilding and resales which has seen a significantrecovery and we have been successful in concluding a good level of business.”

KevinFogarty, an analyst at Westhouse Securities, Braemar’s in-house broker,explained in a note: “Interim results illustrates that the group continued toreap the benefits of diversification during the first half of the financialyear, with Braemar Technical Services delivering a particularly strongperformance.

“AlthoughShipbroking continued to be impacted by lower activity levels for most of theperiod, increased new building and resale activity towards the end of H1 2014has helped rebuild the forward order book and improve the division’s prospects.”

First half feeding frenzy

Kidwell told TradeWinds in an interview immediately afterthe results were released: “There is no doubt with newbuildings in 2013 therehas been something of a feeding frenzy. No doubt people see prices have reacheda level where they see value."

He explains the fresh newbuildings include deals from thecompany’s offshore division, which he describes as a bright spot for theshipbroking wing in the period.

He says there is a dry-cargo bias in the remainder of thenewbuildings, which come from a good spread of business rather than a singleclient.

“The mentality is that there is value to be had and weare at a point in the cycle where it makes sense to invest,” he said.

Kidwell says the recent capesize led upturn in thedry-cargo market has contributed to the positivity in the market. He is less enthusiasticabout the crude tanker space, where he explains it will take two more years beforea substantial recovery occurs.

Kidwell toasts the performance of Braemar’s technicaldivision, which posted an operating profit of £3.0m for the half, up from £1.7ma year ago.

He explains the improvement is due to involvement withLNG newbuilding projects in South Korea and energy projects in the Middle East.

Cory Brothers, the logistics division, saw income climbto £1.3m, helped by the addition of new clients, Kidwelllsays.

With the Rena income gone, the environmentalbusiness saw operating profit slump from $2.0m to £200,000, which Fogarty notes is a more normal level.