Clarksons weathers profits storm to see share value rise

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Ship broker Clarksons overcame a drop in both revenue and profits to see its shares rise by almost nine per cent this afternoon.

The British company, which entered the FTSE 250 in 2015, saw pre-tax profits slip 18 per cent to £18m year-on-year in its six-monthly results up to the end of June 2018 and hauled in £152.6m in revenue, down 2.7 per cent on the corresponding period in 2017.

But CEO Andi Case was adamant that his firm, which helps shipping companies buy tankers and container ships, will recover from a “challenging trading environment” in which shrinking appetites among buyers were compounded by a weak US dollar.

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He said this storm will blow itself out in the latter half of 2018, pointing to better second quarter conditions in some markets, and leaving guidance for the full year unchanged since Aprils trading update, when Clarksons issued a profit warning.

"We should benefit in the second half of the year from these recent improvements and remain confident in the mid to long-term potential for the group,” Case said. “Our investment across the business continues apace, as we drive innovation and remain focused on furthering Clarksons' position at the forefront of the sector."

Investors appeared to agree, with shares growing from £26.05 in value at the markets close on Friday to hit a high of £29.16 today, before falling back to £27.95 at the time of writing.

“The relief would appear to be down to the fact that the company didnt follow up this years earlier profits warning with another one, so these numbers didnt come as too much of a surprise, and while guidance was kept unchanged,” said Michael Hewson, chief market analyst with CMC Markets UK.

“The numbers do indicate though that trading conditions arent exactly optimal.”

Fellow CMC analyst David Madden added: “The rally in the greenback should help the firm with future earnings. Clarkson has maintained its full-year outlook and it appears it got all the bad news out of the way in April profit warning.”

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