Shares in shipping services group Clarkson (CKN) were the best performers in the FTSE 250, gaining 5.5% to £34.45 after the firm posted a 30% increase in first half earnings driven by strong trading across all areas of the business.
For the six months to June, pre-tax profits were £27.5 million against £21.1 million last year on the back of just a 5% rise in revenues to £190.1 million.
As well as a strong result from its broking division, which brings together companies with goods to ship and ship owners, the firm saw a strong recovery in earnings in its financial division, which provides funds for equity and debt financing and takeover activity.
Around 85% of world trade is carried on ships, from raw materials to finished goods, making the stock a bellwether for the global economy.
At the start of 2021 the shipping market had the lowest order book of new ships for 30 years, leading to higher freight rates as well as higher prices for secondhand vessels.
Chairman Sir Bill Thomas was upbeat about the first half and the outlook for the full year. ‘We went into 2021 with an improving demand/supply balance, which has provided the backdrop to more positive shipping markets.
‘The outlook is strong and the board believes we are in the early stages of a recovery in the shipping markets after a decade of unfavourable demand/supply dynamics.’
Clarkson increased its interim dividend from 25p to 27p, on earnings per share of 63.5p. Despite the highs and lows of the shipping market, the firm has raised its total dividend every year for the past 18 years, making it popular with income investors.
