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Clarkson expects continued growth in 2018 as shipping market recovers

Clarkson said it remains cautious of geopolitical and macroeconomic factors
The group raised its dividend by 12% to 73p

UK shipping company Clarkson PLC (LON:CKN) said it has seen a recovery in its core markets that will support growth this year following solid 2017 earnings .

Underlying profit before tax rose 12% to £50.2mln last year and revenue grew 5.8% to £324mln thanks in part to improvements in its broking and financial divisions.

Clarkson suffered a cyber attack in November last year but the company said the impact on the business was “minimal”.

READ: Clarksons says full-year results to meet expectations despite cyber attack

The group raised its dividend by 12% to 73p, marking its 15th consecutive year of increased shareholder payouts.

"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,” said chief executive Andi Case.

Cash flows from operating activities rose to £48mln from £45.6mln the previous year.

Cautiously optimistic outlook 

Clarkson said while the near-future for shipping markets “remains mixed”, it has started to see the first signs of a broader industry turnaround following a sustained period of challenging trading conditions.

However, the company said it remains cautious of geopolitical and macroeconomic issues. It started 2018 with a lower forward visibility of earnings from a reduced forward order book.

“This reflects both the reduced levels of new building orders and lower period business done in the market in recent times, as highlighted last year,” said Case.

“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.” 

Shares edged up 0.15% to 3,295p in morning trading.

Liberum remains bullish 

Liberum left its rating on the stock at ‘buy’ and raised its target price to 3,600p from 3,300p.

“Results in line with expectations, with improvements at broking and financial reflecting a combination of stronger shipping markets and the fruits of past management initiatives to strengthen and broaden the group’s market-leading positions,” the broker said.

“Forecasts unchanged, despite a currency headwind and a smaller forward order book.”

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