As an intermediary, Clarkson (CKN) had zero control of the difficult trading conditions and oversupply that characterised the shipping industry in 2016. Even with the support of a stronger dollar, underlying pre-tax profit slipped 11 per cent to £44.8m in the period. But the 4 per cent share price gain which greeted full-year results shows investors believe that improvements in transactional volumes and market share says more about where the shipbroker is heading.
Even then, better commissions are predicated on several factors. In the dry cargo sector, a continuation of the steady improvement in rates from the historic lows seen 12 months ago will require a fine balance between vessel demolitions and new builds, while the shipping container market will need to find a home for the 7 per cent of the global fleet that lay idle at the end of 2016.
This is all crucial, as the shipbroker normally earns a flat 1.25 per cent of the deals it brokers. In the meantime, Clarkson will look to its increasingly profitable finance and research divisions, both of which have reportedly boosted clients' stickiness in the tough years.
Panmure Gordon now expects adjusted pre-tax profit of £50.1m and EPS of 117p this year, rising to £66m and 155p in 2018.
CLARKSON (CKN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,607p | MARKET VALUE: | £787m | |
| TOUCH: | 2,595-2,609p | 12-MONTH HIGH: | 2,635p | LOW: 1,629p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 1,336p* | NET CASH: | £130m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2016 | 306 | 47.3 | 120 | 65 |
| % change | +1 | +49 | +76 | +5 |
Ex-div: 18 May Payment: 2 Jun *Includes intangible assets of £301m, or 745p a share | ||||
