"The multi-cyclical and volatile nature of our markets has once again been demonstrated by the sudden shift in oil and other commodity prices", says Clarkson (CKN) boss Andi Case. Against this backdrop - and after excluding expenses from the acquisition of Norwegian competitor RS Platou - the shipping broker grew underlying pre-tax profit by 49 per cent to £24m.
Management argues that troubled shipping markets have driven a flight to quality towards the group's full-service client offering, which includes shipping, banking and broking services. Indeed, Clarkson's core broking segment grew operating profit by 46 per cent to £22m, as the effect of the depressed oil price on its offshore markets was offset by strong demand for tankers - irrespective of sector - as well as specialised products and gas transportation.
But the tumbling oil price sent profits in Clarkson's support unit down one-fifth to £2m. Together with Greek debt woes and weak Chinese growth, it also weighed on the corporate issuance of bonds or equities, resulting in a tough first quarter for the group's financial division.
Nevertheless, management is defiant that its broadening of services and expanded geographical reach will help the group weather further headwinds. Indeed, the investment banking operation has already seen transaction levels improving, while the balance sheet should be strengthened by £4m of annual cost synergies created from the RS Platou acquisition.
Broker Nomura forecasts adjusted pre-tax profit of £59m for the year to December 2015, giving adjusted EPS of 145.9p.
| CLARKSON (CKN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,562p | MARKET VALUE: | £773m | |
| TOUCH: | 2,560-2,584p | 12-MONTH HIGH: | 2,855p | LOW: 1,835p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 48 | |
| NET ASSET VALUE: | 1,142p* | NET CASH: | £77m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 112 | 14.1 | 53.1 | 21 |
| 2015 | 145 | 10.8 | 15.0 | 22 |
| % change | +30 | -23 | -72 | +5 |
Ex-div: 10 Sep Payment: 25 Sep *Includes intangible assets of £289m, or 956p a share | ||||
