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Investing.com -- Clarkson (LON:CKN) shares plunged more than 18% on Monday after the company reported a modest rise in full-year profit and revenue but warned of a softer start to 2025 amid geopolitical uncertainties and weaker freight rates.
For the year ended December 31, 2024, the shipping services provider posted revenue of £661.4 million, up 3.4% from £639.4 million in 2023.
Underlying profit before taxation increased by 6% to £115.3 million from £109.2 million the previous year.
The reported profit before tax was £112.1 million, compared with £108.8 million in 2023. Underlying basic earnings per share rose to 286.9p from 275.0p, a 4% increase.
Clarksons maintained its long-standing record of dividend growth, announcing a total dividend per share of 109p for the year, up 7% from 102p in 2023.
The shipping company’s forward order book, which represents contracted revenue for the coming year, stood at $231 million as of December 31, 2024, compared with $217 million at the same point in 2023.
Despite the positive financial performance, CEO Andi Case struck a cautious note on the outlook for 2025, citing ongoing geopolitical conflicts, trade tensions, and inflationary pressures affecting global shipping markets.
"The geopolitical 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," Case said.
The company’s broking division, its largest revenue generator, posted revenue of £529.3 million, a 2.4% increase from £516.8 million in 2023.
The division’s profit before tax was £122.6 million, up slightly from £121.2 million. The financial division saw a decline in profit, posting £5.2 million, down from £6.6 million in 2023, as reduced investor risk appetite and geopolitical tensions weighed on capital markets activity.
Clarksons’ support division delivered a record performance despite disruptions to shipping routes, including reduced transits through the Suez Canal due to geopolitical tensions in the Middle East.
The division’s revenue rose to £65 million from £56.6 million in 2023, with a profit before tax of £7.7 million, up from £6.4 million.
The research division, which provides data and analysis on shipping and offshore markets, also saw growth, reporting revenue of £24.5 million, up from £21.9 million in 2023. Segmental profit before tax increased by 13% to £9.5 million.
While Clarksons maintains a strong balance sheet, with free cash resources rising to £216.3 million from £175.4 million in 2023, the company warned that market conditions have softened at the start of 2025, leading to a slower-than-usual first quarter.
Freight rates and asset values are lower than in 2024, and the company expects a second-half weighted performance for the year.