Clarksons shares jump on record performance fueled by Iran war

Key facts

• Clarksons reported a record first half performance with pre-tax profit up 39% and EPS up 50%.
• The company expects full-year results to be materially ahead of market expectations.
• The dividend was increased to 35p per share.
• The Iran war and disruption to global trade, including the Strait of Hormuz, have boosted business.
• Jeff Woyda was replaced as CFO by Niamh Staunton.

Clarksons' shares rose as much as nine percent on Monday following the announcement of a record first-half performance and an optimistic outlook for the full year. The shipbroker reported a 39% increase in pre-tax profit and a 50% rise in earnings per share compared to the same period last year, attributing the gains to market volatility caused by the Iran war and disruptions to global trade, particularly concerning the Strait of Hormuz.

The company also announced a dividend increase from 33p to 35p, marking its 24th consecutive year of raising shareholder payouts. Clarksons' core shipbroking and investment banking divisions experienced record trading as ships were forced to re-route, leading to longer voyages and a shortage of available vessels. This has resulted in significantly higher commissions.

Panmure Liberum analyst Gerald Khoo noted that Clarksons had surpassed estimates, benefiting from favorable market conditions and past investments in its capabilities. The company also confirmed that veteran chief financial officer Jeff Woyda has been replaced by Niamh Staunton, formerly of BP's shipping finance division, after Woyda's nearly two-decade tenure.

Staunton will take over a remuneration scheme that includes an uncapped bonus policy, which has led to CEO Andi Case earning over £65 million in the past decade and has prompted shareholder revolts. Proxy advisers ISS and PIRC have recommended investors vote against the framework, which ISS stated allows Case to be paid seven times more than his peers. Clarksons has defended the pay package as established practice in the shipbroking industry, contributing to its market leadership.