Clarkson reinstates dividend as broking drives higher H1 profits
Shipping services firm Clarkson said it would reinstate a previously deferred dividend as it reported a “robust” first half with a rise in profits driven by its broking division.
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The company on Monday said it would now pay the equivalent of the 2019 final dividend of 53p per share as an interim dividend next month and also declared a further interim payout of 25p per share which would be paid on December 11.
Underlying profit before taxation rose slightly to £21.1m from £20.1m a year earlier on revenue of £180.4m, up from £167.8m.
Revenue from its broking division increased to £147.1m from £130.1m. The company said it expected the division to remain robust in the second half and anticipated a return to profitability in its financial unit and improved profit from port services.
"While stimulus packages are being rolled out around the world, the impact on the speed and shape of global trade recovery is still to be determined. This, together with macroeconomic and geopolitical sensitivities and ever-changing exchange rates, means that the board believes guidance should currently remain withdrawn for the full year," said chief executive Andy Case.
Within broking, reported stronger charter rates, with tanker and gas markets offsetting weakness in dry bulk, offshore and containers. Clarkson's financial division was hit by challenging capital markets conditions that limited fundraising activity, while the support unit was hit by the lower oil price and Covid-19 restrictions triggering sharp falls in activity supporting the North Sea oil industry.
Analysts at broker Liberum said uncertainty over the ultimate impact of the pandemic on the world economy and international trade pointed to "continued caution being warranted in the short term".
"However, Clarkson remains well positioned to make the most out of whatever market conditions prevail, while continuing to build its digital offering. The resumption of dividends is a clear sign of confidence," added, reiterating a 'buy' recommendation on the stock with an unchanged target price of 3000p.