Clarkson lifts dividend following 'robust' cash performance in 2020

Clarkson reported a “robust” underlying financial performance ahead of market expectations in its preliminary results on Monday, as its revenue fell to £358m in 2020, from £363m in the prior year.

The FTSE 250 shipping services company said its underlying profit before tax for the year ended 31 December came in at £44.7m, down from £49.3m, while on a reported basis it swung to a loss of £16.4m from a profit of £0.2m in 2019.

Underlying earnings per share fell to 106p from 118.8p, while Clarkson’s reported loss per share widened to 95.2p from 42.4p.

The board declared a higher dividend of 79p per share, up from 78p in 2019, marking the 18th consecutive year of dividend growth for the firm.

Operationally, Clarkson said a strong performance in broking more-than-offset weakness in its financial services division, as its saw continued “strong” free cash flow generation.

There was a one-off non-cash impairment charge of £60.6m in relation to securities and offshore for the year, while the board said the company’s forward order book going into 2021 was larger than at the same time last year.

It described the firm’s balance sheet as “robust”, with free cash resources standing at £81.1m as at 31 December, up from £68.7m a year earlier.

Clarkson said its “rapid transition” to remote working amid the Covid-19 pandemic expedited the rollout of its ‘Sea’ digital shipping platform products to its clients.

It said the medium-term macroeconomic environment for shipping was favourable as demand and supply dynamics were set to improve post-pandemic, adding that it was well-positioned to support the “green transition” in shipping, and benefit from the expected economic and global trade recovery.

“2020 could never be described as business as usual, with disruption in demand and global trade, significant volatility in commodity prices and a massive shift in the working environment,” said chief executive officer Andi Case.

“So Clarksons are proud to announce a very robust set of full year results for 2020 which are ahead of market expectations and demonstrate the resilience of our business and the important role we play in the global shipping industry.

“Given the strong cash generation, I am pleased to announce that the board is recommending its 18th consecutive year of increased dividends.”

Case said Clarkson was continuing to benefit from its “robust” business model, and from the investment in recent years in tools for trade.

“Our key areas of focus are not only on growth in all core segments, but also importantly on growth in new segments including renewables, the green transition of the maritime world where we are helping our clients to achieve their ambitious carbon and greenhouse gas reduction targets and continuing the rollout of our technology solution, the Sea platform, to clients.

“As a result of the efforts of the Clarksons team, we are well positioned to benefit from the expected economic and global trade recovery in the years ahead.”

At 0815 GMT, shares in Clarkson were up 0.38% at 2,630p.