In April, Clarkson (CKN) predicted half-year profits would miss expectations following a difficult first quarter. Fewer investment banking transactions in the asset broking division, along with a subdued period for sale and purchase broking, contributed to squeezed broking margins of 14.3 per cent (2017: 17.8 per cent). Deliveries of new dry cargo ships also fell 45 per cent compared with the first half last year, to the lowest level seen since 2008. This was made worse by a 9 per cent weakening in the US dollar, while US trade war fears put shareholders on edge.
But management is more optimistic going into the second half. Some of the deals agreed in the second quarter will start to deliver revenue in the third and fourth quarters, while The Baltic Dry Index (which measures activity in the dry cargo market) has improved by nearly a quarter. The company’s own ClarkSea Index, measuring the overall earnings in the shipping market, also rose 9 per cent year-on-year.
Analysts at Liberum expect pre-tax profits of £43.4m in 2018, giving EPS of 98.7p, down from £50.2m and 117p in 2017. The group is expected to return to profit growth in 2019.
| CLARKSON (CKN) | ||||
| ORD PRICE: | 2,745p | MARKET VALUE: | £ 832m | |
| TOUCH: | 2,740-2,745p | 12-MONTH HIGH: | 3,475p | LOW: 1,970p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 1,407p* | NET CASH: | £60.2m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 157 | 21.9 | 50.8 | 23.0 |
| 2018 | 153 | 18.0 | 42.5 | 24.0 |
| % change | -3 | -18 | -16 | +4 |
| Ex-div: | 06 Sep | |||
| Payment: | 21 Sep | |||
| *Includes intangible assets of £297m, or 980p a share. | ||||
