MARKET REPORT: Clarkson shares rise on group growth forecasts as company capitalizes on growing demand for global deliveries
Shares in Clarkson rose after the group raised its forecast, capitalizing on rising demand for global shipping.
In an update, the FTSE250 firm said its broking arm, which connects shipowners with clients looking to charter vessels, had delivered “particularly good results” in the first six months of the year.
As a result, Clarkson predicted half-year profits of at least £42m, up more than 50% on the previous year. He also remained “confident” despite the uncertain outlook for the global economy, predicting that full-year results would be “significantly ahead” of previous expectations.
Cruise: Clarkson predicted half-year profits of at least £42m
Shares rose 9.1 percent, or 270p, to 3,225p, and analysts at Clarkson brokerage Liberum raised their price target on the stock to 4,750p from 4,650p, noting that the £42m forecast meant the firm was holding on to “record” first half of the year.
Liberum said Clarkson’s business model, as well as its market leadership and global footprint, allow it to remain profitable despite “less favorable” market conditions. Shipping companies have faced volatile conditions during the pandemic as lockdowns shut down factories and cargo hubs, causing demand to plummet.
However, after the easing of restrictions, global demand revived.
The war in Ukraine has also increased demand as supply chains have been disrupted, meaning companies pay more for ships that travel longer distances.
The FTSE 100 was down 0.74 percent, or 53.49 points, at 7,156.37, while the FTSE 250 was down 0.8 percent, or 143.6 points, at 18,711.36.
Market sentiment remained volatile, with banks under pressure on worries about the global economy as better-than-expected UK GDP growth in May was overshadowed by a surge in US inflation to 9.1 per cent in June, well above than in June. Analysts predict a figure of 8.8 percent.
Lloyds was down 1.2 percent, or 0.5 point, at 41.92, while Barclays shed 1.9 percent, or 2.92 points, at 149.22. NatWest fell 1.8 percent, or 4 pence, to 215.9 pence, HSBC lost 0.5 percent, or 2.6 pence, to 527.2 pence and Standard Chartered shed 0.5 percent, or 2 .8p, to 577p.
Analysts have warned that the GDP figures are masking increased inflationary pressure on the UK economy as household budgets are cut.
“Given how important consumer spending is to overall economic growth, the risk of a recession is certainly not gone,” said Danny Hewson of AJ Bell.
But some energy and mining stocks rallied amid hopes for higher metals and energy prices.
Harbor Energy rose 1.2 percent, or 3.8 pence, to 328 pence, while BP rose 0.04 percent, or 0.15 pence, to 377.2 pence, Antofagasta fell 2 percent, or 21p to 1,041.5p while Fresnillo rose 3.9 per cent or 25.4p. r., up to 6784.6 r. Computacenter was on an acquisition spree when it bought US hardware reseller Business IT Source for an undisclosed sum to give it a “significantly stronger presence” in the US Midwest. Shares fell 1.8 percent, or 44 pence, to 2,448 pence.
Asset manager Abrdn was on the back foot, falling 5 percent, or 8.15p, to 154.15p after analysts at Barclays downgraded the stock to “underweight” from “equal weight” and cut their price target to 140 pence from 210 pence after the allocation “ a challenging market for the sector. HSBC downgraded Abrdn from ‘buy’ to ‘hold’ and lowered its target to 175p from 255p.
Shares of several pub groups were in the red. Marston’s fell 3.2 per cent, or 1.52 points, to 45.48, while Mitchells & Butlers fell 5.6 per cent, or 10.1 points, to 170.9.
Meanwhile, staffing firm Pagegroup reported record second-quarter 2022 performance. Gross profit rose almost 26 per cent to £281m as global labor shortages boosted demand. Shares rose 2 percent, or 8.6 pence, to 438.6 pence.