Clarkson's (CKN) reported profits fell due to a non-cash impairment arising from its acquisition of RS Platou back in 2015. Otherwise, shipping volumes, in an otherwise fractious year for global trade, ticked up again, evidenced by a 9 per cent increase in underlying pre-tax profits to £49.3m.
Sales were driven by growth in the broking division, up 12 per cent to £283m – significant given that it accounts for more than three-quarters of the overall total. The group's second-largest business by sales is financial services, which fell by more than a fifth to £35.5m. Chief financial officer Jeff Woyda attributed the drop to “very skinny” activity in the wider capital markets, as well as the markets that the group focuses on.
Clarkson saw an improved forward order book, spurred by demand for digital solutions, with sales up by 16 per cent and over 6,000 individual users across its single-access integrated platform. Despite the gathering activity, the general tone was cautious, as management noted that Covid-19 is likely to impact first-half performance in 2020 and that it is braced for continued volatility in equity markets. However, the group retains a decent buffer in the face of uncertainty, with free cash resources of £68.7m (from £57m in 2018).
Broker Liberum forecasts adjusted pre-tax profits of £36.6m and adjusted EPS of 85.7p in 2020, compared with £49.3m and 118.8p in 2019.
| CLARKSON (CKN) | ||||
| ORD PRICE: | 2,255p | MARKET VALUE: | £686m | |
| TOUCH: | 2,245-2,260p | 12-MONTH HIGH: | 3,135p | LOW: 2,180p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | na | |
| NET ASSET VALUE: | 1,242p* | NET CASH: | £22.3m** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 302 | 31.8 | 68.2 | 62.0 |
| 2016 | 306 | 47.3 | 120 | 65.0 |
| 2017 | 324 | 45.4 | 104 | 73.0 |
| 2018 | 338 | 42.9 | 98.8 | 75.0 |
| 2019 | 363 | 0.20 | -42.4 | 78.0 |
| % change | +7 | -100 | -143 | +4 |
| Ex-div: | 14 May | |||
| Payment: | 29 May | |||
*Includes intangible assets of £238.2m, or 784p a share **Includes lease liabilities of £62.4m | ||||
