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Clarkson - Shares under pressure from falling freight rates

November 2005

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • CKN
  • Price:
  • 835p
The benefit of high levels of commission thanks to historically high freight rates helped  shipbroker Clarkson, post record results. For the six months ended 30 June, turnover increased 38% to £57.7m, underlying operating profit rose 19% to £12m, while a one-off profit of £3.4m was also booked following the sale of two ships in which it held a 58% interest. These results were overshadowed by the decline in the ClarkSea Index (which tracks daily freight rates across the shipping markets) which averaged US$28,100 compared to US$29,800 in H1 2004 and has since fallen to as low as US$20,000. One saving grace for Clarkson was the fact that its brokerage revenues in H1 2005 benefited from contracts signed during Q ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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