Clarkson PLC announced preliminary results for the 12 months ended 31 December 2022.
Summary
· Record underlying profit before taxation* of £100.9m (2021: £69.4m), an increase of 45.4%
· Underlying earnings per share* increased 51.1% to 250.3p (2021: 165.6p)
· Particularly strong performance in the Broking segment
· Full year dividend of 93p, giving rise to a 20th consecutive year of dividend growth
· Forward order book for invoicing in 2023 was US$216m (2022: US$165m), an increase of 30.9%
· Strong balance sheet with free cash resources* of £130.9m (2021: £92.3m) available for future investment
Andi Case, Chief Executive Officer, commented:
“2022 was a record year for Clarksons, and I thank all my colleagues across every area of the business for their hard work, dedication and commitment. This performance, driven by our client-focused culture and consistent strategy of investing in the best teams across all global segments, data, intelligence, analytics, and the best tools for trade, has enabled us to deliver a 20th consecutive year of dividend growth for our shareholders.
“Whilst the global geo-political outlook for 2023 and beyond remains uncertain, the green transition is driving significant activity in our industry. This, coupled with a supply and demand balance that will create meaningful supply-side constraints supporting the market, and our strong forward order book, gives us confidence in the outlook for Clarksons.”
Alternative performance measures (‘APMs’)
Clarksons uses APMs as key financial indicators to assess the underlying performance of the Group. Management considers the APMs used by the Group to better reflect business performance and provide useful information. Our APMs include underlying profit before taxation and underlying earnings per share. An explanation and reconciliation of the term ‘underlying’ and related calculations are included within the ‘Other information’ section at the end of this announcement. All APMs used within this announcement are denoted by an asterisk (*).
Chair’s review
Overview
As I reflect at the end of my first year as Chair, various observations spring to mind as to what makes Clarksons such an exceptional business. First is the quality, energy and focus of all of our employees worldwide, without whom the record results for 2022 we have delivered would not have been possible. Second is our culture and values, which underpin the way we operate and behave and which are reflected in our many strong and enduring client relationships. Finally, and crucially, is our relentless focus on investing in the future of our Company, be that through, for example, the green transition, our continued investment in Sea/ and the training of our people to ensure best-in-class service to our clients.
2022 was a remarkable year for the shipping industry driven by a number of significant “x” factors. As countries were at differing stages of recovery from COVID-19 and China experienced a second lockdown, congestion and disruption were already the key issues in shipping. Then Russia’s invasion of Ukraine caused another wave of wide-reaching consequences, including sanctions and significant changes in both commodity flow and availability, issues not just for shipping but for the wider economy as well. The energy and cost of living crises, combined with inflation and higher interest rates, added further challenges to the global economy, and to the asset-heavy shipping industry.
Against this backdrop, the Group continued to thrive, a testament to both the strategy and the teams within Clarksons. The decarbonisation journey, which is both complex and important for shipping, is now well underway but will take time to complete. Transition will require a number of different solutions, significant investment and the provision of finance to the industry. Clarksons is focused on ensuring we can add value within this process.
We believe our long-term strategic commitment to continuing to invest in our teams, products and services will continue to reap dividends as the market evolves. In addition to extending the depth and breadth of our broking teams, we continue to invest in high-quality data within Clarksons Research, Sea/ – our maritime technology platform, Support covering ports services and supplies, and the Financial division sourcing financing across shipping, offshore, renewables and real estate.
Results
I am delighted to report that underlying profit before taxation* was £100.9m (2021: £69.4m) with underlying basic earnings per share* of 250.3p (2021: 165.6p). Reported profit before taxation was £100.1m (2021: £69.1m) with reported basic earnings per share of 247.9p (2021: 164.6p).
Free cash resources* as at 31 December 2022 were £130.9m (2021: £92.3m).
Dividend
We are extremely proud to confirm that this will be our 20th consecutive year of dividend increases. The Board is recommending a final dividend for 2022 of 64p (2021: 57p). Combined with the interim dividend in respect of 2022 of 29p (2021: 27p), the resulting full year dividend in respect of 2022 results is 93p (2021: 84p). The dividend will be payable on 26 May 2023 to shareholders on the register on 12 May 2023, subject to shareholder approval.
