5th Jan 2024 11:07
(Alliance News) - Clarkson PLC's trading proves it is more than just industry tailwinds which are supporting the firm's earnings, analysts at Liberum said on Friday.
The shipping services firm said its annual performance for 2023 is anticipated to be ahead of current market expectations. It expects underlying pretax profit of no less than GBP108 million. It credits strong trading throughout the final quarter, particularly in its Broking division.
Liberum lifted its 2023 underlying pretax profit forecast for the firm by 5% to GBP108.4 million. It would represent a 7.4% increase from the GBP100.9 million Clarkson achieved in 2022.
The broker noted that its prior forecast was towards the top end of the consensus range, so it expects others to lift their forecasts from lower prior estimates.
"Our forecasts for 2024 and 2025 increase by 2%, pending more detail at the full-year results," Liberum added.
Clarkson reports annual results on March 4.
Liberum noted Clarkson's better 2022 results are being achieved despite "a much tougher shipping rate backdrop".
"This provides clear evidence of Clarkson's structural progress, which has previously been masked by shipping market tailwinds," it added.
"It has been easy for the market to dismiss Clarkson’s performance as being the result of favourable shipping market conditions, with the Clarksea index having risen by 93% in 2021 and by 30% in 2022, both on a year-average basis. In contrast, in 2023 we believe the index fell by 37% on a year-average basis. Although earnings growth is set to be much more modest in 2023 than in the two prior years, it is still positive in tougher market conditions. In our view, this reflects Clarkson’s leading market positions, the resilience of its business model and the strong underlying structural growth of the business."
Clarkson shares shot up 7.4% to 3,505.00 pence each in London on Friday morning.
By Eric Cunha, Alliance News news editor
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