In so far as we have had interim results from Clarkson (CKN) the international shipping services group. These are the first results since they competed the acquisition of RS Platou another shipping broker and investment bank which was a good fit with their own operations. I first wrote about this one and the deal back in March when the shares were trading around the 2000p level. You can click the link above if you want to read more about the background to the deal etc.
Any way in today's results, in brief, the turnover and profits are up substantially being boosted by the effects of the acquisition, however the earnings are actually down by 12.7% presumably as a result of the extra shares issued to finance it. They also make reference to the difficult market conditions faced by many of their markets although they suggest this is both a threat and an opportunity for them. They did however warn at their AGM and also reiterated here that as a result they expect their results to be more weighted towards the second half this year.
That always concerns me as it then leaves a Company in this situation with a lot to do and they are then potentially a hostage to fortune if other unexpected developments take place. We have already seen some downgrades to what look like punchy forecasts for this year with expected eps coming down from 158p to about 152p since June which still suggests growth in the mid teens despite the set back at the interims today. I note also that the dividend is forecast to be ramped up by over 20% to 72.7p which seems a bit aggressive in the context of today's modest 1p (4.76%) increase in the interim to 22p. This also looks odd in the context of their historic growth rate of 7% in the dividend in the last few years, unless they promised this as part of the deal or have indicated a 2x cover policy that I'm not aware of. Nevertheless given the statement and the current market conditions I reckon the risks to the earnings and the dividend growth may be on the downside from here.
Ahead of any changes post the deal the shares, which have moved on up a little since I suggested shipping out when I sold them in June, are now trading at the top end of their price and rating range. Thus at 2750p they were trading on 18x with a 2.64% yield according to Stockopedia, which looks full to me given the risks to forecasts and the possibility of a second half profits warning if things don't come through as they expect. Thus while it is obviously a good and well managed group, they do face some headwinds and look fully valued to me. So if you are still in them I would suggest it is time to disembark and I note Mr. Market has also seen fit to mark them down by 4 to 5% this morning to about 2620p.