Clarkson shares buoyed by global shipping boom
SHARES in Clarkson surged after the group hiked forecasts as it cashed in on surging demand for global shipping.
In an update, the FTSE 250 firm said its broking division, which links ship owners with clients seeking to chart vessels, performed ‘particularly well’ in the first six months of the year.
As a result, Clarkson predicted a half-year profit of no less than £42m, a rise of over 50pc on the previous year. It also remained ‘confident’ despite the uncertain outlook for the global economy, predicting its full-year results would be ‘materially ahead’ of previous expectations.
Shares rose 9.1pc, or 270p, to 3225p, and analysts at Clarkson’s house broker Liberum hiked their target price on the stock to 4750p from 4650p, noting the £42m forecast meant the firm was on course for a ‘record’ first half.
Liberum said Clarkson’s business model as well as its market leadership and global footprint allowed it to remain profitable despite ‘less than supportive’ conditions in markets. Shipping firms faced volatile conditions during the pandemic as lockdowns shut factories and cargo centres, causing demand to slow sharply.
However, after restrictions were relaxed global demand boomed.
War in Ukraine also increased demand as supply chains have been disrupted, meaning companies are paying more for ships to travel longer distances.
The FTSE 100 dropped 0.74pc, or 53.49 points, to 7156.37 while the FTSE 250 slipped 0.8pc, or 143.6 points, to 18,711.36.
Market sentiment continued to remain fragile, with banks coming under pressure amid fears for the global economy as a better-thanexpected rise in UK GDP in May was overshadowed by a surge in US inflation to 9.1pc in June, much higher than the 8.8pc figure predicted by analysts.
Lloyds was down 1.2pc, or 0.5p, at 41.92p while Barclays dropped 1.9pc, or 2.92p, to 149.22p. NatWest declined 1.8pc, or 4p, to 215.9p, HSBC lost 0.5pc, or 2.6p to 527.2p and Standard Chartered eased 0.5pc, or 2.8p, to 577p.
Analysts warned the GDP data was masking the increasing pressure inflation was exerting on the UK economy as household budgets were squeezed.
‘Given how significant consumer spending is in overall economic growth, the risk of recession certainly hasn’t gone away,’ said AJ Bell’s Danni Hewson.
But some energy and mining stocks rose amid hopes of higher prices for metals and energy.
Harbour Energy was up 1.2pc, or 3.8p, at 328p while BP rose 0.04pc, or 0.15p, to 377.2p, Antofagasta fell 2pc, or 21p, to 1041.5p and Fresnillo gained 3.9pc, or 25.4p, to 6784.6p. Computacenter was on the acquisition trail as it snapped up US equipment reseller Business IT Source for an undisclosed sum to provide it with a ‘ much stronger presence’ in the midwestern US. The shares dipped 1.8pc, or 44p, to 2448p.
Asset manager Abrdn was on the back foot, sliding 5pc, or 8.15p, to 154.15p after analysts at Barclays downgraded the stock to ‘underweight’ from ‘equal weight’ and cut their target price to 140p from 210p after highlighting a ‘difficult’ market for the sector. HSBC lowered its rating on Abrdn to ‘hold’ from ‘buy’ and trimmed its target to 175p from 255p.
Shares in several pub groups were in the red. Marston’s dropped 3.2pc, or 1.52p, to 45.48p and Mitchells & Butlers slipped 5.6pc, or 10.1p, to 170.9p.
Meanwhile, recruitment firm Pagegroup posted a record performance for the second quarter of 2022. Gross profit rose nearly 26pc to £281m as a global labour shortage boosted demand. Shares rose 2pc, or 8.6p, to 438.6p.