UK shipbroking group Clarksons has turned in a record profit for the third year in a row, saying its scale allowed it to thrive in a turbulent year.
The London-listed company logged a net profit of £85.8m ($108.7m), up from £79.6m in 2022.
Record underlying pre-tax earnings were £109.2m, compared with £100.9m the year before.
Chief executive Andi Case said 2023 was a year of disruption in shipping.
“The business today is a reflection of two decades’ investment in our strategy, and we are confident in our outstanding team, our breadth of market-leading services, our technologies and our geographic reach to meet the growing needs of our clients in a world which is ever more complex,” he added.
Case said bosses are optimistic about the broker’s near, medium and long-term future.
Clarksons is paying a dividend of £1.02 per share for 2023, the 21st consecutive year of pay-out growth.
The forward orderbook stands at $217m for 2024, and free cash was up at £175.4m from £130.9m. This sum is available for future investment, the broker said.
Revenue grew to £639.4m from £603.8m the year before.
Positioned for growth
Case explained that the strategy is to invest in market-leading positions, pioneering technology and top teams.
This has “optimally positioned us to capture future opportunities in the global shipping markets”, he said.
“We will continue all elements of this investment strategy and seek further opportunities for M&A [mergers and acquisitions],” the CEO added.
Chairman Laurence Hollingworth said the result was driven by strong growth in broking, support and research divisions.
“Sector trends remain favourable, global trade continues to grow in both scale and complexity, and the green transition in shipping is moving ahead apace,” he added.
Case said the increase in shipping demand has been exacerbated by tonne-mile impacts arising from a variety of disruptions, either climate or geopolitically related.
“Our results reflect our resilience, agility and market leadership as we provide integrated advice, intelligence and services to clients, helping them make better decisions in increasingly complex times,” the CEO said.
Case noted that shipping markets have had little respite from geopolitical challenges since the turn of the decade.
“Disruptions to trade routes in any form pose challenges that reach far beyond the world of shipping. The need for the movement and surety of food, energy and goods is paramount to keeping both businesses and countries moving globally,” he added.
“It is in times such as these that the shipping industry has to adapt to meet new challenges. Clarksons’ data and intelligence, market coverage, flexibility and depth of connectivity ensures that our clients have the tools and information to make the best decisions and maintain trade flows as efficiently as possible,” the CEO said.
Energy shipping led the way for the broking division, with gas, tankers, specialised products, offshore and car carriers all experiencing strong conditions, and dry bulk and container freight rates rallying later in the year.
The sale-and-purchase team had another very successful year as demand for secondhand vessels was high, Case said.
Broking made a pre-tax profit of £121.2m, up £3.6m over the year.
The financial division reported profit of £6.6m, down from £7.8m in 2022, with the support arm at £6.4m versus £5m.
Research saw earnings rise to £8.4m from £7m.
In December, the group completed the sale of an industrial unit that it had owned for several years.
The property’s favourable location as part of a wider site redevelopment meant Clarksons achieved a price of above market value, adding a gain of £3.5m to the accounts.
Of this, £1.3m was given to its charitable Clarkson Foundation.
Clarksons also said director Birger Nergaard will not seek re-election to the board this year.
The venture capitalist joined in 2015.
