Shipping broker Clarkson (CKN) warned back in March that currency headwinds would cause trouble for the company this year. But, despite the depreciation in the value of the dollar, underlying profits in the first half of the 2014 financial year soared 46 per cent. This was ahead of a 24 per cent increase in the average ClarkSea index of shipping rates, and also marks a 10 per cent improvement on the second half of 2013.
Finance director Jeff Woyda attributed the resilient performance to Clarkson's decision to invest heavily in its business during what continues to be a downturn in the wider shipping market. These investments include new offices, including in New York, and a slew of new staff hires. Mr Woyda said acquisitions "of companies or people" would continue as long as the group's healthy cash balances hold up.
Despite ongoing volatility in shipping rates, every business division at Clarkson is now in profit. This includes the financial division, which underwent a restructuring in 2013. It reported £300,000 of profit in the first half, compared with a £2.8m loss last year, thanks to improved rates for dry cargo shipping and higher transaction volumes.
Broker Panmure Gordon expects pre-tax profits of £32.5m for the current financial year, giving EPS of 127p.
| CLARKSON (CKN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,225p | MARKET VALUE: | £423m | |
| TOUCH: | 2,161-2,225p | 12-MONTH HIGH: | 2,750p | LOW: 1,839p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 734p* | NET CASH: | £75m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 89 | 9.0 | 32.7 | 19 |
| 2014 | 112 | 14.1 | 53.1 | 21 |
| % change | +26 | +57 | +62 | +11 |
Ex-div: 10 Sep Payment: 26 Sep *Includes intangible assets of £40.5m, or 213p a share | ||||
