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Clarkson swings to profit in 2021

Clarkson PLC announced preliminary results for the 12 months ended 31 December 2021.

Summary
• Record underlying profit before taxation* of £69.4m (2020: £44.7m), an increase of 55.3%
• Underlying earnings per share increased 56.2% to 165.6p (2020: 106.0p)
• Particularly strong performance in Broking and Financial segments
• 19th consecutive year of dividend growth
• Forward order book for invoicing in 2022 was US$165m (2021: US$116m), an increase of 42.2%
• Robust balance sheet with free cash resources* of £92.3m (2020: £81.1m)

Andi Case, Chief Executive Officer, commented:

“Our record 2021 results are testament to the strategy which we have followed and communicated to stakeholders over recent years.

It is with great pride that I reflect on the strength of our people in all sectors, roles and geographies, together comprising the best team in the world of shipping, offshore and renewables.

We are positive about the future of the shipping industry. The outlook for Clarksons remains strong and we believe the business will continue to benefit from its market-leading position.”

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 for further information. All APMs used within this announcement are denoted by an asterisk (*).

Chair’s review

Overview

I am delighted and privileged to have been appointed Chair of Clarksons after what has been a record year for the Group. The Group’s strategy, combined with vision, quality and determination across the entire business, has enabled us to successfully navigate the global pandemic, maintain our excellent service for our clients, maximise the opportunities of improving markets and once again deliver shareholder value.

2021 saw the start of a recovery in the shipping markets, with improved rates and increasing asset values in many verticals, resulting from a better supply/demand balance, low market order book and congestion arising from COVID-19 and supply chain challenges. Clarksons has emerged from the pandemic in better shape than ever. We enter 2022 from a position of strength and are very well placed to capitalise on favourable market dynamics.

The green transition is a global megatrend which is underpinning change in shipping. As shipowners and charterers drive to meet their net zero commitments, all are looking closely at supply chains for a lower emissions option. Over the past year, Clarksons has made significant progress in scaling up its offering to advise our clients on the changing industry and the importance of becoming a more responsible business. It is in our ethos to continue to adapt to the market and our clients’ demands, and we will continue to do this into 2022 and beyond.

Results

Underlying profit before taxation* was £69.4m (2020: £44.7m) with underlying basic earnings per share* of 165.6p (2020: 106.0p).
Reported profit before taxation was £69.1m (2020: £16.4m loss) with reported basic earnings per share of 164.6p (2020: 95.2p loss).
Free cash resources* as at 31 December 2021 were £92.3m (2020: £81.1m).

Dividend

Clarksons is increasing its dividend for the 19th consecutive year, continuing its progressive dividend policy to reflect the cashgenerative nature of the business, the strong balance sheet and record forward order book. In addition, the Board has retained resources to enable it to maximise shareholder value by maintaining flexibility to act swiftly, particularly to opportunities arising from the green transition, technology and other areas of our business.

The Board is recommending a final dividend for 2021 of 57p (2020: 54p). Combined with the interim dividend in respect of 2021 of 27p (2020: 25p), the resulting full year dividend in respect of 2021 results is 84p (2020: 79p). The dividend will be payable on 27 May 2022 to shareholders on the register on 13 May 2022, subject to shareholder approval.

People

The people throughout Clarksons are of the highest quality, and through dedication, hard work and expertise they have continued to overcome the challenges thrown at them over this past year from the pandemic and changing economic backdrop. We are hugely grateful to all our colleagues for their contribution and commitment.

At Clarksons we take pride in helping others. There has never been a more important time to give back to the community, and during the past year The Clarkson Foundation has focused on projects covering mental health, homelessness, opportunities for employment and global poverty. The Foundation aims to make meaningful positive change around the world and has exciting initiatives planned for 2022.

Board

Clarksons was pleased to welcome Martine Bond to the Board and as a member of the Audit and Risk Committee in March 2021. Martine brings extensive technology expertise to the Board, as well as more than 20 years’ experience in the financial services industry. She has significant board experience across legal entities in Europe, North America and Asia, further adding to the Board’s international expertise.

On behalf of the Clarksons team, I would like to thank Sir Bill Thomas for his valuable contribution during his tenure as Chair and wish him every success in his future endeavours.

Outlook

In 2022, we expect the favourable supply/demand dynamics to continue. The supply of new ships continues to be affected by the structural reduction in shipbuilding capacity compared to 2008 whilst the economic recovery from the COVID-19-induced pandemic has strengthened the demand side. We have a very strong forward order book and the outlook for freight rates remains positive.

We remain conscious of the current geopolitical uncertainty, which could impact sanctions, exchange rates and commodity supply, alongside the global backdrop of inflationary pressures and rising interest rates. The team is therefore extremely focused on intelligence, analysis and relationships to ensure that we are well placed to support our clients as the market continues to evolve.

We will always evaluate opportunities to invest in the business. We will continue to hire the best emerging talent available to further consolidate our position in the industry. The green transition and technology will continue to be at the forefront of change in the maritime industry, and we will continue to invest significantly to help our clients reduce the environmental impact of the shipping industry

We are positive about the future of the business, and believe we are in a strong position to continue to deliver for our clients across all verticals and thus increase shareholder value over the long term.

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