In two important ways, Clarkson 's (CKN) markets mirror the global economy. Trade - be it seaborne or cross border - is growing. But industry overcapacity, just like saturated commodities markets, has caused huge pain among the companies the shipping services group does business with.
Chairman James Hughes-Hallett described the current challenges as "unprecedented" in his full-year results commentary, though he continues to believe the company can benefit as macro-economic woes spark a flight to quality among shipping operators.
Following the acquisition of broker and investment bank Platou last year, Clarkson has a much broader base to exploit that dynamic. Eleven months' contribution from the former competitor - whose operations barely overlapped their purchaser's - contributed to a 49 per cent boost in underlying pre-tax profit to £50.5m. This helped the 42 per cent hike in broking profits, though the impact was most marked in the financial division, which tripled revenues and swung to a £1.2m profit despite a collapse in debt markets.
The 9.5m of new shares issued to fund the Platou deal also explains the 9 per cent drop in underlying earnings per share EPS to 122p. Panmure Gordon has downgraded this year's forecast to 123.5p, assuming pre-tax profit of £53.8m, against 121.9p and £50.5m in 2015.
CLARKSON (CKN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,910p | MARKET VALUE: | £577m | |
| TOUCH: | 1,900-1,910p | 12-MONTH HIGH: | 2,855p | LOW: 1,710p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 1,119p* | NET CASH: | £122m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 195 | 35.4 | 134 | 50 |
| 2012 | 176 | 22.9 | 85.0 | 51 |
| 2013 | 198 | 22.0 | 82.0 | 56 |
| 2014 | 238 | 25.2 | 91.9 | 60 |
| 2015 | 302 | 31.8 | 68.2 | 62 |
| % change | +27 | +26 | -26 | +3 |
Ex-div: 19 May Payment: 3 Jun *Includes intangible assets of £263m, or 872p a share. | ||||
