MARKET REPORT: Shares in Clarkson surge

MARKET REPORT: Shares in Clarkson surge after group hikes forecasts as it cashes in on surging demand for global shipping

Shares in Clarkson surged after the group hiked forecasts as it cashed in on surging demand for global shipping. 

In an update, the FTSE250 firm said its broking division, which links ship owners with clients seeking to chart vessels, performed ‘particularly well’ in the first six months of the year. 

As a result, Clarkson predicted a half-year profit of no less than £42m, a rise of over 50 per cent on the previous year. It also remained ‘confident’ despite the uncertain outlook for the global economy, predicting its full-year results would be ‘materially ahead’ of previous expectations. 

Cruising: Clarkson predicted a half-year profit of no less than £42m

Shares rose 9.1 per cent, or 270p, to 3225p, and analysts at Clarkson’s house broker Liberum hiked their target price on the stock to 4750p from 4650p, noting the £42m forecast meant the firm was on course for a ‘record’ first half.

Liberum said Clarkson’s business model as well as its market leadership and global footprint allowed it to remain profitable despite ‘less than supportive’ conditions in markets. Shipping firms faced volatile conditions during the pandemic as lockdowns shut factories and cargo centres, causing demand to slow sharply. 

However, after restrictions were relaxed global demand boomed. 

War in Ukraine also increased demand as supply chains have been disrupted, meaning companies are paying more for ships to travel longer distances. 

The FTSE 100 dropped 0.74 per cent, or 53.49 points, to 7156.37 while the FTSE 250 slipped 0.8 per cent, or 143.6 points, to 18,711.36. 

Market sentiment continued to remain fragile, with banks coming under pressure amid fears for the global economy as a better-than-expected rise in UK GDP in May was overshadowed by a surge in US inflation to 9.1 per cent in June, much higher than the 8.8 per cent figure predicted by analysts. 

Lloyds was down 1.2 per cent, or 0.5p, at 41.92p while Barclays dropped 1.9 per cent, or 2.92p, to 149.22p. NatWest declined 1.8 per cent, or 4p, to 215.9p, HSBC lost 0.5 per cent, or 2.6p to 527.2p and Standard Chartered eased 0.5 per cent, or 2.8p, to 577p. 

Analysts warned the GDP data was masking the increasing pressure inflation was exerting on the UK economy as household budgets were squeezed. 

‘Given how significant consumer spending is in overall economic growth, the risk of recession certainly hasn’t gone away,’ said AJ Bell’s Danni Hewson. 

But some energy and mining stocks rose amid hopes of higher prices for metals and energy. 

Harbour Energy was up 1.2 per cent, or 3.8p, at 328p while BP rose 0.04 per cent, or 0.15p, to 377.2p, Antofagasta fell 2 per cent, or 21p, to 1041.5p and Fresnillo gained 3.9 per cent, or 25.4p, to 6784.6p. Computacenter was on the acquisition trail as it snapped up US equipment reseller Business IT Source for an undisclosed sum to provide it with a ‘much stronger presence’ in the midwestern US. The shares dipped 1.8 per cent, or 44p, to 2448p. 

Asset manager Abrdn was on the back foot, sliding 5 per cent, or 8.15p, to 154.15p after analysts at Barclays downgraded the stock to ‘underweight’ from ‘equal weight’ and cut their target price to 140p from 210p after highlighting a ‘difficult’ market for the sector. HSBC lowered its rating on Abrdn to ‘hold’ from ‘buy’ and trimmed its target to 175p from 255p. 

Shares in several pub groups were in the red. Marston’s dropped 3.2 per cent, or 1.52p, to 45.48p and Mitchells & Butlers slipped 5.6 per cent, or 10.1p, to 170.9p. 

Meanwhile, recruitment firm Pagegroup posted a record performance for the second quarter of 2022. Gross profit rose nearly 26 per cent to £281m as a global labour shortage boosted demand. Shares rose 2 per cent, or 8.6p, to 438.6p.