Quiet start to the week but...

...we have had final results from Clarkson (CKN) which is a £600 million market cap. United Kingdom-based provider of integrated shipping services group which operates from offices in 20 countries on six continents.

The results seem to be ahead a the earnings level coming in at 134.2p v 127p consensus forecast according to Stockopedia. The dividend was however slightly shy at 60p for the year v a 61p forecast form the same source, although it was up by a reasonable 7% and is well covered by earnings and cash flow. Encouragingly this was slightly ahead of the 6% or so that they have achieved over the last 5 years and the Company points out that they have increased their dividend consecutively, as part of their progressive policy, for the last 12 years.

The other main feature of the year was their acquisition of of RS Platou ASA (Platou) a leading international broker and investment bank, focused on the offshore and shipping markets which completed in February this year. This is covered in detail in today's announcement in which they said it:

"not only brings together two great teams, but transforms the strength and depth of our offering and further enhances the best in class service we deliver to our global clients. The board firmly believes this is a unique opportunity to combine two leading businesses, led by proven and experienced management teams, to create a 'best in class' fully integrated offer across shipping and offshore, broking and banking. The businesses are highly complementary with little overlap and we expect to generate significant opportunities for organic revenue and margin growth, creating shareholder value over the medium-term."

They do however acknowledge that they face extremely challenging conditions in some markets but they seem confident that they should benefit from their leading positions and extra services they can offer to clients as a result of the acquisition. The Mr market seem to like it as he has marked the shares up by 4 to 5% this morning.

Summary & Conclusion
A slightly difficult one to get your head around given the difficult background to some of the markets that they serve. However, there are several attractive aspects like a market leading position, strong balance sheet (net cash of £92.3m), a well covered and steadily growing dividend and potential benefits to come from what seems like a good acquisition.

The shares trade on around 12 to 13x 2015 forecast earnings and sport a yield of 3.6% at a share price of 2100 pence, if they achieve the currently forecast 73 pence dividend for 2015. At this share price they also have a current earnings yield of 6.7% which is about average and It scores in the top decile of the Compound Income Scores with a score of 94.

So it seems like a well managed business operating in a slightly difficult market which can be cyclical. Despite this they have been able to and seem confident in growing the dividend going forward. The rating seems about average and may be fair enough, so it probably looks like a strong hold rather than a raging buy.

However they do seem to have found some support at the 1900p level since the end of last year (see chart below) and there is also a gap at around 2400p which might be a good technical mid range target in the medium term perhaps, which would put it on 15x and a 3% yield for this year. Talking of which I also note that in the last 12 months the PE range based on this years forecasts has been roughly 12 to 17.5x and the yield 2.65% to 4%, so I guess there could be some upside to the rating on that basis as the acquisition beds down and if the Baltic Dry Index were to recover from its recent long term lows as this is seen as a key indicator for shipping and global trade. But I'll leave you to decide for yourself if you want to get on board this one or not.