Clarkson PLC (‘Clarksons’) is the world’s leading provider of integrated shipping services. From offices in 25 countries on six continents, we play a vital intermediary role in the movement of the majority of commodities around the world.
Preliminary results
Clarkson PLC today announces preliminary results for the 12 months ended 31 December 2024.
Summary
· Another record underlying profit before taxation* of £115.3m (2023: £109.2m), an increase of 6%
· Underlying basic earnings per share* increased 4% to 286.9p (2023: 275.0p)
· Full year dividend of 109p, an increase of 7% on 2023, giving rise to a 22nd consecutive year of dividend growth
· Forward order book as at 31 December 2024, for invoicing in 2025 was US$231m (31 December 2023: US$217m)
· Strong balance sheet with free cash resources* of £216.3m (2023: £175.4m)
| Year ended | Year ended | |
| 31 December 2024 | 31 December 2023 | |
| Revenue | £661.4m | £639.4m |
| Underlying profit before taxation* | £115.3m | £109.2m |
| Reported profit before taxation | £112.1m | £108.8m |
| Underlying basic earnings per share* | 286.9p | 275.0p |
| Reported basic earnings per share | 277.1p | 275.2p |
| Dividend per share | 109p | 102p |
* Classed as an Alternative Performance Measure (‘APM’). See ‘Other information’ at the end of this announcement for further information.
Andi Case, Chief Executive Officer, commented:
“2024 was another year of disruption, complexity and opportunity for global shipping markets and against this backdrop I am immensely proud of the hard work and dedication of all my colleagues in producing another record result.”
“The geo-political outlook remains uncertain as we enter 2025, with ongoing regional conflicts and trade tensions creating uncertainty for markets reflected by freight rates and asset values currently lower than 2024. The resolution or continuation of these events during the year will provide potential headwinds and tailwinds to the Group’s performance as we support our clients through this complexity.”
“Irrespective of near-term headwinds, we remain committed to investing in the business, across people, intelligence and technology to ensure we maintain our market-leading position across all sectors.”
| Enquiries: | ||
| Clarkson PLC:Andi Case, Chief Executive OfficerJeff Woyda, Chief Financial Officer & Chief Operating Officer | 020 7334 0000 | |
| Camarco:Billy CleggJennifer Renwick | 020 3757 4980 | |
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 (*).
About Clarkson PLC
Clarkson PLC is the world’s leading provider of integrated services and investment banking capabilities to the shipping and offshore markets, facilitating global trade.
Founded in 1852, Clarksons offers its diverse and growing client base an unrivalled range of shipbroking services, sector research, on-hand logistical support and full investment banking capabilities in all key shipping and offshore sectors. Clarksons continues to drive innovation across its business, developing digital solutions which underpin the Group’s unrivalled expertise and knowledge with leading technology.
The Group employs over 2,100 people in over 60 different offices across its four divisions.
The Company has delivered 22 years of consecutive dividend growth. The highly cash-generative nature of the business, supported by a strong balance sheet, has enabled Clarksons to continue to invest to position the business to capitalise on opportunities in its markets.
Clarksons is listed on the main market of the London Stock Exchange under the ticker CKN and is a member of the FTSE 250 Index.
For more information, visit www.clarksons.com
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as amended (together, ‘MAR’). Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Chair’s review
As I reflect on 2024, I am extremely proud of the way Clarksons has successfully navigated a landscape marked by significant political, economic and environmental change.
Our expert and market-leading global teams have supported our clients through these turbulent times, offering strategic insights to help overcome challenges and capitalise on emerging opportunities.
The geo-political landscape has been particularly fast-moving, with ongoing global conflicts underscoring the critical importance of strong governance, deep knowledge and high-quality data as we advise our clients on vital decision-making against a backdrop of increasingly complex international sanctions.
Results
This year marks the third consecutive year that our business has achieved an underlying profit before tax* of over £100m. Revenue increased by 3.4% to £661.4m, driven by growth across the business. This outstanding achievement underscores the importance, and success, of our strategy to focus on global expansion, recognising opportunities, entering new markets, hiring the best individuals and teams, and building a business with the scale and leading market position to deliver sustained growth.
Dividend
We are delighted that, for the 22nd consecutive year, and in line with our progressive dividend policy, the Board is recommending an increased final dividend of 77p per share, bringing the total dividend for 2024 to 109p per share, an increase of 7% compared to 2023.
People
We are now a global group of over 2,100 talented and diverse employees with an expanded breadth of services and reach. We are proud of being able to attract and retain the best talent in the industry.
Our people are unquestionably our most important asset and the key to our success, and we thank each and every member of Clarksons for their unstinting hard work and dedication.
We know from employee feedback how The Clarkson Foundation aligns to the culture of the Group and are proud to be able to support its aim of making a meaningful positive impact in the world.
Board
In August we welcomed Constantin Cotzias to the Board as an independent Non-Executive Director, and member of the Audit and Risk Committee.
Constantin is European Director at Bloomberg, where he is Global Head of External Affairs, the Chair of Bloomberg Tradebook and a Director of Bloomberg Multilateral Trading Facility. Constantin brings a strong understanding of financial markets, data and technology, and also experience in growing data-focused businesses. His experience will be invaluable as we continue to grow the business across all of these areas.
Birger Nergaard stepped down from the Board in May 2024 following the Company’s AGM. We thank him for nine years of valuable and dedicated service to the Group.
Outlook
2024 has been a year of resilience and growth for Clarksons. We have delivered strong financial performance in a challenging environment and supported our clients through extensive global change.
The opportunity before us remains significant, as commodity demands combined with energy security and environmental factors, provide a complex backdrop for market growth in the medium term.
However, following a year of extensive political change, ongoing conflicts in the Middle East and Russia-Ukraine, adding further complexities, markets have softened as economies grapple with the immediate impacts of this phase of change.
We are uniquely positioned through our global and regional expertise, accompanied by our exceptional data insights, to respond to any changes that arise. We will focus all our efforts on supporting our clients as they evolve their strategies to meet these changes.
As we look ahead, we continue to hire and build on our strengths, driving sustainable growth for our shareholders. Our robust cash flow and forward order book (‘FOB’) affords us agility and enables us to take swift and decisive decisions to make investments to support the business.
Thank you for your continued support.
Laurence Hollingworth
Chair
7 March 2025
Chief Executive Officer’s review
2024 was another year of disruption, complexity and opportunity for global shipping markets, and I am immensely proud of, and grateful to, our colleagues across the world for their unwavering commitment and exceptional contributions, which have led to another record year for Clarksons.
The fundamental supply and demand dynamics of the industry remained in fine balance during the year, with underlying trade volume growth and disruptions to trade patterns increasing demand, while the supply side remained challenged by low orderbooks in certain sectors and a tight shipbuilding market. Seaborne trade grew by 2.4% in 2024, driven by global economic consumption and rising energy and resource requirements.
Conversely, despite a 13% increase in global shipyard output in the year, the global fleet grew steadily at 3.4%, weighted towards the containers and LNG sectors. Prices for newbuild vessels remained high, reaching peak 2008 levels, following inflationary pressures at shipyards, firm forward cover and strong ordering volume.
Ongoing conflicts in the Middle East and Russia-Ukraine continued to underscore the importance and fragility of global supply chains. An increasingly complex and evolving sanctions environment added to challenges for shipowners and charterers alike with some 1,300 ships in the global fleet now sanctioned. These events led to significant shifts in the global flows of energy and resources and the largest increase in tonne miles in the sector for 15 years. Our position at the forefront of the industry, bolstered by our global and regional expertise and deep market intelligence, has enabled us to support our clients in managing these complexities effectively.
The green transition remains a significant underlying trend as the industry moves towards alternative fuels and more efficient technology, and embarks on an unprecedented fleet renewal programme to meet 2030 and 2050 emissions targets. Half of orders by tonnage in 2024 involved alternative fuel and 7% of the global fleet is now fitted with green or alternative fuel technology, a number which is forecast to rise to 20% by 2030. Retrofitting has also been a key theme, with 34% of the fleet now equipped with energy-saving technology. Our Green Transition and Research teams continue to provide clients with the support, data and intelligence they need as they respond to the opportunities and challenges the move towards decarbonisation provides.
Broking
The Broking division had a very strong year, supported by an active sale and purchase market across newbuilding and secondhand transactions, and generally robust conditions across all other sectors. The forward order book (‘FOB’) continues to grow, both for invoicing in 2025 and further out over the coming years. This FOB gives us good visibility of baseline future earnings.
Geo-political disruptions, the redistribution of energy flows and an underlying increase in Atlantic to Pacific commodity trade resulted in significantly increased tonne miles, supporting rates and activity in chartering. The offshore sector also performed well during the year, with rates reaching record levels on the back of investor sentiment following a supply-side rebalancing and incremental demand gains.
Carbon emissions from the industry increased slightly due to the increase in tonne miles. Our Broking and Green Transition teams continue to advise clients on fleet renewal programmes and the latest green technologies to achieve longer-term environmental targets.
The Broking division continued to invest in expanding its global footprint through the hiring of new people and teams both in the UK and overseas. Key hires included leaders from both competitors and principals, increasing the scope and services we offer our clients, and extending the products we cover in both the physical and derivative markets. The truly global nature of the business is demonstrated by the fact that two-thirds of our brokers are now based outside of the UK, with representation in every major shipping geography and sector. We remain focused on being best in class in every sector of shipping, servicing clients with local expertise supported by the data, technology and insights of a truly global business.
Segmental profit before taxation from Broking was £122.6m at a margin of 23.2% (2023: £121.2m and 23.5%).
Financial
The Financial division faced a more challenging year, with reduced investor risk appetite in certain sectors amid geo-political uncertainty. Capital markets activity was also tempered in shipping equities as companies continued to focus on debt repayments and returns to shareholders. Investor sentiment was more stable across the metals and minerals and offshore sectors.
Overall, our investment banking team supported and advised clients on executing a number of mandates across, particularly, debt capital markets and M&A.
Debt capital markets performed particularly well, supported by a record year of activity in the Nordic high-yield bond market.
Investor interest in shipping project finance remained healthy, albeit real estate market activity has continued to be challenged.
The division reported a segmental profit before taxation of £5.2m in 2024 compared with £6.6m in 2023.
Support
Our Support division had a record year despite the significant reduction in transits through the Suez Canal. The division’s increasingly diversified offering across the offshore oil and gas, marine and renewable energy sectors, and broadening client base, has enhanced performance during recent years.
The activities of Gibb Group, specialists in tools and supplies, and safety and survival products, were enhanced further by the acquisition of Trauma & Resuscitation Services Limited, now rebranded to Gibb Medical and Rescue, in early 2024. The company is a leading provider of enhanced first aid training, compliance and emergency response services and has performed beyond management’s expectations in its first year of ownership.
The Support division produced a segmental profit before taxation of £7.7m and a 11.8% margin in 2024 (2023: £6.4m and 11.3%).
Research
As markets become more complex and the supply of data becomes increasingly key to decision-making, our leading Research division plays a progressively more important role in offering depth of knowledge and best-in-class insights across the sector.
We continue to invest in providing market-leading intelligence which, combined with our understanding of the shipping and offshore markets and digital capabilities, is supporting over 3,500 clients globally. The division is constantly evolving its products across geo-political trends, the energy transition and fleet evolution. 2024 also saw increasing demand from clients to embed data within workflows to support real-time information and decision-making. The increasing demand from clients has resulted in recurring revenue increasing to 90%.
The division increased segmental profit before taxation by 13% to £9.5m (2023: £8.4m).
Sea
Our Sea platform continues to move forward, achieving growth in both customer base and volumes. Sea Trade 2.0 was released in the second half of the year, with all clients now successfully migrated to the new operating platform. This more flexible technology base will enable our clients to benefit from increasingly efficient workflows and data access to manage their pre-fixture activities, and will provide the base for faster and more extensive cross-market product releases in the future.
Outlook
For some years now we have started each new financial period with an uncertain geo-political outlook; 2025 has started with more uncertainty than most due to political change, ongoing regional conflicts, increased trade tensions, tariffs and sanctions, inflation and changing monetary policy across global economies. As I write this report, the impact of these uncertainties is that freight rates and asset values have broadly fallen, which has meant that the value of spot business done to date is less than the same period last year.
Our FOB continues to grow, both for 2025 and beyond, providing good visibility of baseline future earnings. The FOB for invoicing in 2025, as at the end of 2024, amounted to US$231m, US$14m higher than at the beginning of 2024. The invoicing profile of this FOB, together with the expected uptick in spot revenues following a slow start to the year, means that 2025 is expected to be second-half weighted, as it has been in most years.
Once the current uncertainty starts to recede, the markets will, over time, rebalance, incorporating trade currently operated by the shadow fleet, and clients will again be able to be more strategic in their forward planning, including a focus on fleet renewal programmes. We will continue to invest in our business to ensure we maintain market-leading positions across all sectors, that we use value added technology, and that we have the best market intelligence and insight to support and advise our clients.
The strength of our balance sheet, excellent cash generation and a healthy FOB going forward many years gives us confidence to be at the forefront of opportunities for growth and to consider opportunities for M&A where accretive to the business. Clarksons is uniquely positioned to manage and advise clients through these more volatile markets.
Andi Case
Chief Executive Officer
7 March 2025
Financial review
Revenue: £661.4m (2023: £639.4m)
Underlying profit before taxation*: £115.3m (2023: £109.2m)
Reported profit before taxation: £112.1m (2023: £108.8m)
Dividend per share: 109p (2023: 102p)
The Group delivered another outstanding set of results in 2024, with revenue of £661.4m (2023: £639.4m) and underlying profit before taxation* of £115.3m (2023: £109.2m), both ahead of the comparative period. The performance was driven by a strong underlying operating result of £101.7m (2023: £100.2m) and finance income of £14.9m (2023: £10.5m), which benefited from the supportive interest rate environment. Underlying basic earnings per share* grew 4.3% to 286.9p (2023: 275.0p).
Reported profit before taxation and basic earnings per share were £112.1m (2023: £108.8m) and 277.1p (2023: 275.2p) respectively. Our performance has enabled the Group to continue its progressive dividend policy, which is now in its 22nd consecutive year. Accordingly, a full year dividend of 109p is recommended as described in more detail below.
Free cash resources* increased to £216.3m (2023: £175.4m); the Group’s diversified portfolio of businesses continues to deliver strong cash-generation across the cycle, which provides support for investment in the best people, market intelligence and technology to support and advise our clients. Where complementary to strategy, including establishing new teams, setting up in new geographies, expanding our coverage or increasing market presence, the Group actively pursues strategic and value-enhancing M&A opportunities.
2024 performance overview
The Broking division had another successful year, reporting revenue of £529.3m (2023: £516.8m), representing growth of 2.4%. Supply and demand dynamics within the industry remained highly complex as global GDP growth and disruptions to trade patterns increased demand, while the supply side remained challenged by low orderbooks in certain sectors and a tight shipbuilding market. The division generated a segmental profit of £122.6m (2023: £121.2m), advising clients through complexity and enhancing its market-leading position across all sectors of shipping.
Geo-political complexity, energy security and the green transition remained consistent trends in 2024. Most sectors were impacted by disruption to key trade routes, notably the Suez and Panama canals. Whilst conditions in Panama eased towards the end of 2024, traffic through Suez remained at historically low levels. This disruption, in addition to the ongoing redistribution of energy flows following the Russia-Ukraine conflict, resulted in one of the largest increases in tonne miles for 15 years and provided upward momentum to rates across most sectors, in particular the dry cargo and containers sectors. Offshore oil and gas markets also performed well during the year, with day rates at record levels.
Newbuild sale and purchase activity across the industry was particularly strong in 2024, reaching the third highest total on record. Healthy cross-sector demand was supported by generally robust shipping markets, a focus on green fleet renewal and competition for berths at shipyards. Secondhand activity this year has also been positive, supported by bulker sales volumes and strong tanker and container activity against a backdrop of firm market conditions.
In the tankers and gases sectors, whilst market conditions were generally supportive of rates during the year, these were below the levels experienced in 2023. Both sectors experienced headwinds in the second half of the year from a slowdown in global demand, cuts in production and delays to projects coming online.
The Financial division faced a challenging economic backdrop in 2024, including inflation, extended periods of high interest rates and reduced investor confidence caused by geo-political tensions. Against this backdrop and faced with increased competition, the division performed well, reporting revenue of £42.6m (2023: £44.1m) and segmental profit before taxation of £5.2m (2023: £6.6m).
Activity and investor sentiment in the shipping and offshore markets remained generally positive throughout 2024 and the investment banking team remained active, executing several deals as clients sought to restructure and recapitalise their balance sheets or issue debt to support further investment and growth. Revenue from commissions on secondary trading was lower than in 2023, driven mainly by weaker activity in the equity capital markets. There was, however, strength in the debt capital markets, where favourable market conditions, particularly in the Nordic high-yield bond market, increased both revenue and the volumes of transactions executed.
Within the project finance business, positive investor sentiment enabled shipping and offshore activities to perform well, although real estate opportunities continue to be impacted by the prolonged high-interest rate environment, a volatile bond market and challenging construction and rental prices.
The Support division produced a record performance in 2024, delivering revenue of £65.0m (2023: £56.6m) and a segmental profit of £7.7m (2023: £6.4m). This was despite challenges in some sectors, including reduced transits through the Suez Canal impacting Egyptian agency business, delays and reduced activity in offshore energy projects in Northern Europe and pressure on margins in UK agency business. The division continues to look for opportunities to leverage its UK and Northern European footprint to support clients, including initiatives such as the agreement with Norway-based Peak Group to combine expertise in port agency logistics, expanding its reach across the expanse of the North Sea.
In addition to core agency activity, the division continues to focus on supporting the offshore oil, gas and renewables sectors through the provision of specialist tooling, training and equipment. In February 2024, this offering was extended further through the acquisition of Trauma & Resuscitation Services Limited, which rebranded to Gibb Medical and Rescue during the year.
The Research division also produced another excellent financial performance generating revenue of £24.5m (2023: £21.9m) and a segmental profit of £9.5m (2023: £8.4m). Growth was achieved from new client penetration, and a cross-selling of services. Recurring revenue continues to represent over 90% of the division’s sales, as clients value the market-leading insights and intelligence provided by the team. The division continues to innovate and invest in providing a consistent flow of high-quality, market-leading insights which this year have included a macro focus on decarbonisation and geo-political disruption.
Administrative expenses
The Group incurred underlying administrative expenses* of £526.0m (2023: £508.8m), representing an increase of 3.4%. The main driver of the increase year on year was continued investment in people and teams, which has enabled us to expand our product offering across new markets and geographies and to develop and train new talent across the business. Although the Group is focused on disciplined expense management, it is not immune from inflationary pressure and economic decisions affecting the global economy. The announcement in the Autumn 2024 Budget that UK employers’ national insurance will rise by 1.2% is expected to increase the Group’s remuneration and variable incentive costs in 2025.
The Group remains committed to investing across all areas of the business to ensure it has the best people, technology and market intelligence to support and service our clients globally.
Acquisitions
At the beginning of the year, the Group completed the acquisition of Trauma & Resuscitation Services Limited (since rebranded to Gibb Medical and Rescue) for an initial consideration of £2.0m. The acquisition extends the Group’s offering to the oil and gas, marine and renewable energy sectors by providing market-leading first aid training, compliance and emergency response services. The business performed ahead of management’s expectations in its first year of ownership, leveraging the breadth of the Group’s network to generate new business opportunities.
In May 2024, the Group completed an asset purchase agreement with Independent Shipping Agencies Limited to acquire selected assets for an initial consideration of £0.1m. The investment increases the Support division’s service offering to the dry cargo sector through the provision of superintending services.
In September 2024, the Support division also completed an asset purchase agreement with Wind Farm Equipment Limited for an initial consideration of £0.7m. This transaction further enhances the capabilities of the tooling and supplies business in the renewable energy sector.
Acquisition-related costs of £3.2m (2023: £2.6m), which include the above transactions, have been disclosed separately in the consolidated income statement, and relate to the amortisation of intangibles and costs linked to ongoing employment obligations. We estimate acquisition-related costs for 2025 to be £3.0m assuming no further acquisitions are made.
Dividend
The Board is recommending a final dividend in respect of 2024 of 77p (2023: 72p) which, subject to shareholder approval, will be paid on 23 May 2025 to shareholders on the register at the close of business on 9 May 2025.
Together with the interim dividend in respect of 2024 of 32p (2023: 30p), this would give a total dividend of 109p for 2024, an increase of 7% on 2023 (2023: 102p) and representing the 22nd consecutive year the Group has increased returns to shareholders. In reaching its decision, the Board took into consideration the Group’s 2024 performance, balance sheet strength, ability to generate cash and forward order book.
Finance income and costs
The Group reported finance income of £14.9m (2023: £10.5m), as strong underlying cash generation from the business and proactive treasury management enabled the Group to capitalise on an extended period of high interest rates. Central banks’ review of monetary policy saw interest rates cut towards the end of 2024, a trend which is forecast to continue in 2025. Finance costs were £1.9m (2023: £2.2m) and are mainly comprised of interest expenses on lease liabilities.
Taxation
The Group reported an underlying effective tax rate* of 22.5% (2023: 21.4%). The Group’s underlying effective tax rate remains stable and is reflective of the broad international operations of the Group. The Group’s reported effective tax rate was 23.0% (2023: 21.1%).
Foreign exchange
The Group is exposed to adverse movements in foreign exchange as its revenue is mainly denominated in US dollars whereas operating expenses are denominated in local currencies and financial performance is reported in sterling. The average sterling to US dollar exchange rate during the year was US$1.28 (2023: US$1.25), providing a headwind to this year’s financial performance.
Free cash resources
The Group ended the year with cash balances of £431.3m (2023: £398.9m) and a further £62.0m (2023: £39.9m) held in short-term deposit accounts and government bonds, classified as current investments on the balance sheet.
Net cash and available funds*, being cash balances after the deduction of the total cost of accrued bonuses, at 31 December 2024 were £243.7m (2023: £201.1m). The Board uses this figure as a better representation of the net cash available to the business since bonuses are typically paid after the year-end, hence an element of the year-end cash balance is earmarked for this purpose. It should be noted that accrued bonuses include amounts relating to the current year and amounts held back from previous years which will be payable in the future.
A further measure used by the Board in taking decisions over capital allocation is free cash resources*, which deducts monies held by regulated entities from the net cash and available funds* figure. Free cash resources* at 31 December 2024 were £216.3m (2023: £175.4m).
In addition to these free cash resources*, the Group has a strong balance sheet and has consistently generated an underlying operating profit and good cash inflow. Management has stress tested a range of scenarios from the base case, modelling different assumptions with respect to the Group’s cash resources and, as a result, continues to adopt the going concern basis in preparing the financial statements.
Balance sheet
Net assets at 31 December 2024 were £495.7m (2023: £456.6m). The balance sheet remains strong, with net current assets and investments exceeding non-current liabilities (excluding pension assets and lease liabilities as accounted for under IFRS 16 ‘Leases’) by £257.7m (2023: £206.5m). The Group’s pension schemes had a combined surplus before deferred tax of £12.3m (2023: £13.4m).
Forward order book (‘FOB’)
The Group earns some of its commissions on contracts where the duration extends beyond the current year. Where this is the case, amounts that can be invoiced during the current financial year are recognised as revenue accordingly. Those amounts which are not yet invoiced, and therefore not recognised as revenue, are held in the FOB. In challenging markets, such amounts may be cancelled or deferred into later periods.
The Directors review the FOB at the year-end and only publish the FOB items which will, in their view, be invoiced in the following 12 months. At 31 December 2024, this estimate was US$231m (31 December 2023: US$217m).
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, underlying earnings per share, net funds and free cash resources.
Jeff Woyda
Chief Financial Officer & Chief Operating Officer
7 March 2025
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