Clarkson shares major FTSE 250 risers after shipbroker raises expectations

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

The world’s largest shipping services company now expects to report underlying pre-tax profits of at least £115m in 2024, having made a record £109.2m the previous year.

clarkson stock rose 9.25 per cent to £42.50 on Friday afternoon following the announcement, making them the top performers on the FTSE 250 index.

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

Many shipping operators have responded by diverting their ships around the Cape of Good Hope in South Africa, adding 10 to 14 days to an average voyage.

The war in Ukraine has also forced ships to make longer distance 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 the Drewry World Container Index.

Before the war between Israel and Hamas, Clarkson benefited from skyrocketing 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 brokerage Peel Hunt said elevated orders for newbuild vessels, which hit 17-year highs in 2024, should “particularly benefit” Clarkson’s brokerage division in the coming years.

He added that oversupply risks are “very low,” except in certain categories such as automobile transporters and liquefied natural gas transporters, due to stabilization of shipyard capacity, a strong US dollar and stronger environmental laws. strict.

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

“We expect this to further impact container demand, which is a relatively small revenue stream for the group and will be mitigated by higher levels of recycling.”

Little known outside the shipping industry, Clarkson investors have enjoyed more than two decades of consecutive annual dividend increases.

This has mainly occurred under the leadership of Andi Case, who faced her eighth consecutive share rebellion last year after receiving a £12m compensation package.

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