Clarksons profit rises amid 'early signs' of market recovery

Clarksons lifted its dividend on Monday as it posted a 12% jump in full-year underlying pre-tax profit amid early signs of a recovery across shipping markets.

In the year to the end of December 2017, underlying pre-tax profit rose to £50.2m on revenue of £324m, up 6%. Underlying earnings per share were up 11% to 116.8p and the company upped its dividend by 12% to 73p.

On a reported basis, pre-tax profit slipped to £45.4m from £47.3m following the sale in 2016 of a stake in maritime trading house Baltic Exchange.

Clarksons said the shipping market has displayed "some early signs of a recovery" this year following a sustained period of challenging trading conditions for the industry. Despite ongoing headwinds in certain sectors, the strengthening of the broader global economy in 2017 has boosted the shipping market, highlighted within dry cargo where the Baltic Dry Index ended the year 42% higher than it started.

Chairman James Hughes-Hallett said: "Whilst we remain cautious about the near-term direction of the industry, we are pleased to report that Clarksons has once again delivered a confident performance on the back of this wider macro-economic improvement and continues to deliver substantial value to our shareholders.

"Improvements across a number of divisions over the past year have been particularly pleasing, notably in the dry cargo freight market and container sector, as well as the strong performance in investment banking and project finance."

The company said its forward order book for this year stood at $93m, down from $112 as at 31 December 2016.

Chief executive officer Andi Case said: "We start 2018, as we did 2017, with lower forward visibility of earnings from a lower forward order book. This reflects both the reduced levels of newbuilding orders and lower period business done in the market in recent times, as highlighted last year.

"Nevertheless, spot volumes and rates have been improving, which during 2017 more than offset the lower forward order book brought forward, and produced increased revenue across the business."

At 0915 GMT, the shares were up 0.8% to 3,315p.