Clarkson shares key FTSE 250 gainers after shipbroker raises expectations

Shares in shipbroker Clarkson rose sharply on Friday after the group told investors it expects full-year results to be slightly ahead of market forecasts.

The world’s largest shipping services company now expects to make underlying pre-tax profits of at least £115 million in 2024, after a record £109.2 million last year.

Clarkson Shares rose 9.25 per cent to £42.50 on Friday afternoon after the announcement, making them the best performing index of the FTSE 250.

Over the past year, turbulence in the Middle East and attacks by Houthi militants on container ships have reduced traffic through the Suez Canal.

Many shipping companies have responded by diverting their ships around the Cape of Good Hope in South Africa, adding ten to fourteen days to the average voyage.

The war in Ukraine has also forced ships to make longer voyages to pick up important raw materials such as oil and gas.

As a result, average freight rates have more than doubled since December 2023, from $1,661 per 40-foot container to $3,986, according to Drewry’s World Container Index.

Before the war between Israel and Hamas, Clarkson benefited from surging sales of consumer goods following the easing of Covid-related restrictions.

This caused unprecedented congestion at major ports due to a significant shortage of new cargo ships.

Analysts at broker Peel Hunt said the increased level of orders for newbuilds, which reached a 17-year high in 2024, should “particularly benefit” Clarkson’s brokerage division in coming years.

It added that the risks of capacity oversupply are “very low,” except in certain categories such as car carriers and liquefied natural gas vessels, due to the shipyard’s stabilizing capacity, a strong U.S. dollar and stricter environmental laws.

However, he said: ‘There is a risk of a ‘Trump slump’ in some industries as the US imposes tariffs and rolls back green incentives.

‘We expect this will most impact demand for containers, which is a relatively small revenue stream for the group and will be mitigated by higher levels of recycling.’

Little known outside the ship brokerage industry, Clarkson’s investors have enjoyed consecutive annual dividend increases for more than two decades.

This happened largely under the leadership of Andi Case, who suffered his eighth consecutive shareholder revolt last year after receiving a £12 million compensation package.

That made Case one of the highest paid bosses of a London-listed company, ahead of HSBC’s Noel Quinn, who earned £10.6 million, Tesco’s Ken Murphy, who was paid £10 million, and the bosses of BP and Shell, both of which cost approximately £8 million.