MARKET REPORT: Shipshape at Clarkson as it delivers record profits

Clarkson climbed after the shipping firm posted a record set of full-year results as the industry continues to roar back from the pandemic.

The stock rose 7.5 per cent, or 235p, to 3350p after it posted a pre-tax profit for 2021 of £69.4million, up 55 per cent year-on-year, while revenues jumped to £443.3million from £358.2million.

As a result of the strong performance, the company’s dividend for the year was lifted to 84p per share from 79p in 2020, the 19th year in a row the firm has increased its payout.

Booming demand: Shipping firm Clarkson rose 7.5% after it posted a pre-tax profit for 2021 of £69.4m, up 55% year-on-year, while revenues jumped to £443.3m from £358.2m

The record year came as the shipping industry bounced back from the pandemic and experienced a surge in demand as companies looked to shift their products after lockdown measures crippled global trade.

Clarkson was also upbeat for the year ahead, noting that demand was being strengthened by lower rates of shipbuilding, leaving more consumers vying for existing vessels. 

However, the group was conscious of ‘geopolitical uncertainty’ following Russia’s invasion of Ukraine, which it said could impact commodity supplies, currency exchange rates and the effects of sanctions.

Russ Mould, investment director at AJ Bell, said the results from Clarkson were ‘impressive’ and the firm’s leading position in the shipping market would ‘stand it in good stead as the current supply chain crisis, only exacerbated by the war in Ukraine, increases the importance of its services’.

Meanwhile, analysts at broker Liberum hiked their target price on the stock to 4650p from 4600p, saying the company was ‘well positioned’ to exploit a recovery in shipping markets from the pandemic. They added that the group would also be a ‘winner’ from a shift to new fuel technologies as the sector moved towards lower carbon emissions.

The FTSE 100 was down 0.4 per cent, or 27.66 points, at 6959.48 while the FTSE 250 fell 1.12 per cent, or 217.9 points, to 19169.78.

The prospect of a ban on Russian energy by the UK and other Western nations rattled markets, while the conflict continued to push oil and natural gas prices to record highs.

Stock Watch – Trident Royalties

Trident Royalties saw its shares trade near record highs amid hopes of fresh gold profits. 

The firm flagged that the first gold had been poured last month at the Lincoln mine in California from stockpiled material stockpiled.

It added that preparations to begin mining at the site had been mostly completed.

Trident has a 1.5 per cent royalty on any sold gold produced at Lincoln up to around £2.3million, after which the royalty is reduced to 0.75 per cent. 

Shares climbed 2.2 per cent, or 1.1p, to 51.6p.

However, the oil price spike helped pull the blue-chips upwards as BP shares were lifted 3.8 per cent, or 13.35p, to 361.5p while Shell added 8.1 per cent, or 147.6p, to 1981p.

There are fears that the surging cost of energy, food and other commodities will combine with a hit to economic growth to cause ‘stagflation’ for many countries.

Hargreaves Lansdown analyst Susannah Streeter said shortages caused by the conflict will make the cost of living crisis ‘even more painful’ and will pile pressure on central banks to raise interest rates to counter inflation. 

However, such rate hikes could make costs ‘more unbearable’ and push economies ‘back into a downturn’, Streeter added. Travel stocks suffered more turbulence amid worries over rising fuel costs and a potential hit to passenger demand caused by the war.

British Airways owner IAG was down 5.9 per cent, or 7.24p, at 116.24p while Easyjet shed 7.5 per cent, or 35.8p, to 439.5p and Wizz Air descended 6.6 per cent, or 177p, to 2496p.

A predicted slowdown in consumer spending and lending also hit banking stocks, with Lloyds slumping 4.1 per cent, or 1.78p, to 41.25p, Barclays losing 3.3 per cent, or 5.18p, to 151.62p, NatWest down 4.8 per cent, or 9.65p, to 192.85p, Standard Chartered lower by 4 per cent, or 18.8p, at 450.4p and HSBC fell 0.3 per cent, or 1.6p, to 466.05p.

Defence group BAE Systems gained 7.1 per cent, or 49.2p, to 740.8p as investors predicted increased demand following the Russian invasion. 

The firm also completed the acquisition of US company Bohemia Interactive Simulations for £150million.

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