Clarkson shares prime FTSE 250 risers after shipbroker ups expectations

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

The world’s biggest shipping services firm now expects to report making at least £115million in underlying pre-tax profits in 2024, having made a record £109.2million the previous year.

Clarkson shares jumped 9.25 per cent to £42.50 by late Friday afternoon following the announcement, making them the FTSE 250 Index’s best performer.

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

Many shipping operators have responded by rerouting their ships around South Africa’s Cape of Good Hope, adding 10 to 14 days to an average trip.

The Ukraine war has also forced vessels to take longer journeys to pick up important commodities like oil and gas.

Consequently, average freight rates have more than doubled since December 2023, from $1,661 per 40-foot container to $3,986, according to Drewry’s World Container Index.

Before the Israel-Hamas war, Clarkson profited from soaring consumer goods sales following the loosening of Covid-related restrictions.

This caused unprecedented congestion at major ports owing to a significant shortage of new cargo vessels.

Analysts at broker Peel Hunt said the elevated level of newbuild ship orders, which reached its highest levels for 17 years in 2024, should ‘particularly benefit’ Clarkson’s broking division in the coming years.

It added that capacity oversupply risks are ‘very low,’ except in certain categories like car carriers and liquefied natural gas carriers, due to stabilising shipyard capacity, a strong US dollar and stricter environmental laws.

However, he said: ‘There is a risk of a ‘Trump slump’ in some verticals due to the US imposing import tariffs and rolling back green incentives.

‘We expect that this would impact container demand the most, which is a relatively small revenue stream for the group and will be mitigated by higher levels of recycling.’

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

This has mostly happened under the leadership of Andi Case, who faced his eighth successive shareholder rebellion last year after receiving a £12million compensation package.

That made Case one of the best-paid bosses of a London-listed company, ahead of HSBC’s Noel Quinn, who made £10.6million, Tesco’s Ken Murphy, who got £10million and the bosses of BP and Shell, who both made about £8million.