Clarkson Lifts Dividend For 15th Year As It Sees Shipping Turnaround

12th Mar 2018 08:50

LONDON (Alliance News) - Clarkson PLC on Monday reported a drop in profit in 2017 due to lack of a one-time gain recorded in the prior year, but revenue showed steady growth, prompting a double-digit dividend hike.

The FTSE 250-listed shipping services company reported a pretax profit of GBP45.4 million, down from GBP47.3 million in 2016, primarily due to the lack of a GBP11.1 million gain from the sale of shares in the Baltic Exchange in 2016.

On an underlying basis, pretax profit rose to GBP50.2 million from GBP44.8 million, on revenue that rose to GBP324.0 million from GBP306.1 million. Clarkson noted that the majority of revenue was earned in foreign currency, amid a strong performance helped by signs of recovery in the shipping markets as the broader economy strengthens.

Clarkson declared a final dividend of 50.0 pence per share, up from 43p the prior year, bringing the total payout to 72p, up 12% from 65.0p. It noted this marked 15 consecutive years of dividend increases.

The company said its forward order book stood at USD93.0 million at the end of 2017, down from USD112.0 million due to the low levels of orders in 2018 for the design and construction of new ships, and the prevalence of spot business in a "still highly challenging" rate environment.

Clarkson said it has been encouraged by the current rebalancing of supply and demand in the shipping sector, with rising activity levels in its key markets, the strengthening of the oil price in the second half of 2017, and increased production and infrastructure spend adding momentum for medium term growth.

It said that, while the near-term future for the shipping markets remains mixed, "we have seen improvements in a number of our markets and are beginning to see the first signs of a broader industry turnaround".

Chief Executive Officer Andi Case said: "I am pleased to report another year of strong growth as we have consolidated our market-leading position and continue to innovate and expand our offering to keep Clarkson at the forefront of the shipping industry. The business continues to generate significant cash flows to fund investment and drive shareholder returns, reflected in our 15th year of consecutive increased dividend pay-out.

"We believe 2018 will be a year of continued growth as early indicators of recovery are showing across our core markets. With our broad, 'best in class' offering across the shipping sector, Clarkson is well positioned to capitalise on the opportunities this presents," Case added.

Shares in Clarkson were up 0.5% at 3,305.00 pence on Monday.

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