Smooth sailing for the shipping giant, shares trading up.
Clarksons plc's interim result for the six months to 30 June 2017 have been released today, with the market reacting favourably and shares trading slightly up around 2%.
The Group is now debt free after the repayment of their last loan notes in 2017, as they report a revenue increase of 6.5% to £156.8m and underlying profit before tax up 12% to £24.5m. Underlying EPS is also up 9% to 57.5p and the interim dividend is up 1p to 23p.
Panmure and Liberum released notes today in light of these results, with the interim numbers in-line and slightly ahead of both brokers respectively. Panmure and Liberum have both reiterated their recommendations of buy.
The Group said today their "solid cash position means that irrespective of market conditions, we are able to invest in the business for future growth."
Despite shipping industry margins remaining lacklustre on the whole, Clarksons working capital is currently over £71m and Panmure forecasts this to reach £150m prior to shareholder distribution by the end of 2018.
CEO Andi Case had this to say regarding the results:
"We are pleased with our performance so far in 2017, increasing revenue and volumes in difficult shipping and offshore markets. As we see signs of a rebalancing across some of the shipping markets, we are optimistic in our ability to capitalise on the upturn in the markets when it occurs"
The shares trade at a premium to their peers, with the 1-year forecast PE ratio at over 20x, compared to a sector average of only 12x. Clarkson scores well on the Joel Greenblatt magic formula with a respectable 7.4% earnings yield and a very strong ROCE of over 80%, according to Stockopedia numbers.