CLARKSON PLC

Sale of freight ferry for 5.4 million


The Board of Clarkson PLC ('Clarkson') is pleased to announce the sale of its
freight ferry, the CFF Seine, which currently operates in the Irish Sea. The
ferry, part of Clarkson's non-core logistics business, has been sold to Express
Shipping A/S for a cash consideration of 5.4 million (3.8 million). The sale
is expected to complete by early December and the proceeds will be reinvested in
Clarkson's core business.

The value of gross assets disposed of will be 1.7 million and for the ten
months to 31 October 2007 the ship generated 0.5 million of trading losses
before tax (2006 full year losses 1.0 million). The pre-tax profit on sale of
2.1 million, along with the accumulated trading losses up to the point of sale,
will be treated as a discontinuation of the non-core ferry logistics operation
in the 2007 financial statements

Shares of drybulk shippers jumped on Friday as the cost of chartering vessels extended its advance, a sign that the global economy -- powered in large part by China -- is expanding at a smart pace.

Drybulk future rates were up about 17% from last week with an average Capesize rate at $137,000 per vessel per day, up from $116,000, said Cantor Fitzgerald analysts. Meanwhile, spot rates for Capesize vessels, which are the largest ships, shot up on Friday to $177,418, up 2.9%, from $172,369 on Thursday, but down slightly from last week. A year ago, however, the rate was below $68,000.

One reason may be that the worlds largest iron ore producer, Brazils Companhia Vale do Rio Doce (nyse: RIO - news - people ), said on Thursday that it had begun discussions with its customers over iron-ore prices for next year. China is the worlds biggest iron importer, and it gets 24% of its needs from Brazil. Analysts and investors are expecting significant price increases for iron ore in 2008, indicating strong demand. In turn, dry bulk forward rates for 2008 are also showing increases.

On Friday, dry bulk shipping stocks shot up, with those most exposed to the spot market posting the biggest rises.

DryShips (nasdaq: DRYS - news - people ), which is heavily exposed to spot rates, saw its shares jump 5.0%, or $4.52, to $94.48 at the close, while Diana Shipping (nyse: DSX - news - people ) shot up 4.5%, or $1.52, to $35.41. Excel Maritime (nyse: EXM - news - people ) rose 1.4%, or 76 cents, to $53.54; Quintana Maritime (nasdaq: QMAR - news - people ) gained 3.1%, or 79 cents, to $26.55; and Euroseas (nasdaq: ESEA - news - people ) increased 4.0%, or 58 cents, to $15.20.

Dahlman Rose analyst Omar Nokta said Chinas demand for ships to deliver steel exports continues to be strong, which proves that the global economy isnt slowing. Until we start seeing steel prices ease, things are still very strong, Nokta said.

Last year at this time, Nokta said, there were also a lot of concerns, but he kept reassuring investors that as long as drybulk stocks were strong the economy was doing fine. At this moment in time drybulk is still rocking, but it remains to be seen whats going to happen going forward.

For now, Chinese demand keeps increasing with projects lined up for next year. Right now it doesnt seem like theyll just go off a cliff, Nokta said.

The Associated Press contributed to this article.

WHAT A DAY

BIG DAY TOMORROW

Clarkson PLC said it expects its second-half trading result to be 'substantially' ahead of the board's original expectations as majority of its business has performed very well despite a weak US dollar.

The company said this result has been driven by particularly strong performances in the dry cargo, derivatives and sale and purchase businesses.

Clarkson Plc. said it expects that its full-year results will be hit by an 8 million pound provision made against claims against it from two Russian state-owned shipping companies, but added that its performance continues to be in line with its expectations.

The company said it has continued to trade strongly since the announcement of its preliminary results on March 17, and added that it is confident of delivering further underlying growth.

On April 29 Clarkson said that as a result of the discovery of new evidence and on-going discussions with the claimants Sovcomflot and Novoship, it would make a

further provision against the claims of 8 million pounds 'without any admission of liability'.

Commodity Shipping Index Advances the Most Since at Least 1985


http://www.bloomberg.com/apps/news?pid=20601087&sid=aiE9Cavy3HzY&refer=home

Gone in here for a substantial buy.

I gather that ckn is more dry cargo than Braemar which deals more with wet so may perform better with iron ore etc shipping rates volatile though could be a good momentum trade if not buy and hold till the pearly gates

Yep its on a roll though Falc, so dent get left behind..

FUNDIES

Clarkson PLC

FORECASTS
2008 2009

Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Panmure Gordon
04-02-09 BUY 38.94 141.04 46.00 25.07 90.78 46.00

Daniel Stewart
30-01-09 BUY 41.70 154.20 46.00 27.40 101.40 46.00

Charles Stanley Securities
15-01-09 BUY 38.60 142.86 44.00 25.50 95.77 44.00

2008 2009
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Consensus 38.76 142.01 46.00 25.30 95.77 46.00
1 Month Change 2.11 10.01 1.23 -2.15 -2.89 0.61
3 Month Change 2.40 11.18 1.39 -13.81 -45.03 -2.57


GROWTH
2007 (A) 2008 (E) 2009 (E)

Norm. EPS 26.88% 28.79% -32.56%
DPS 11.76% 21.05% 0.00%

INVESTMENT RATIOS
2007 (A) 2008 (E) 2009 (E)

EBITDA 28.80m 41.11m 27.06m
EBIT 25.10m m m
Dividend Yield 8.22% 9.96% 9.96%
Dividend Cover 2.90x 3.09x 2.08x
PER 4.19x 3.25x 4.82x
PEG 0.16f 0.11f -0.15f
Net Asset Value PS 195.18p 486.17p 538.10p


Looks like a potential recovery candidate here.

Good day for this stock, its derd cheap and its on a roll.

from the front line i can tell you that freight rates are at rock bottom ..... personally i would not touch any shipping stock until there is a significant sign of world economic upturn

Significant, hmm

Green shoots as per the bloomberg report above will do for me at the moment cyners.

Broker note out late this afternoon..

05-Feb-09 Clarkson CKN Daniel Stewart Buy 495.50p 700.00p - Reiteration

700p Buy Target.

i don't know their logic or even if it has any value!
judging by the movement/volume today, this stock is very illiquid and therefore surely prone to wild swings.

however, i can promise you that what i wrote about ocean feight rates is 100% correct.
as an example ...... in early/mid 2008, the basic rate from china to europe was $3000 .... it is now free or near enough .... actually you still have to pay CAF and BAF, but that complicates unecessarily

Ill take mi chances with the 3 brokers above cyners, nothing personal.

that's fine .... they may have good reason, but suggest you take a look at a chart for Baltic Rates, though not sure where to find that

www.investmenttools.com should do the trick for you .... certainly there has been a sudden very sharp bounce, but i perceive no reason for it

http://www.bloomberg.com/apps/cbuilder?ticker1=BDIY%3AIND
Baltic chart

i have some pix to scare you of idle vessels in S'pore which i'll try to work out howto post on here.
Also, please note that Senator Liners are shutting down ..... this is an important carrier, and i'm sure they will have a sight on the web

=======

i have pix sent to me on e-mail .... but you'll have to wait until i get to the office by the looks of it

From what I remember when the commods boom was running full tilt post credit crunch, people were scrambling to build ships but could not get the finance to do so. The market really went into a spin when operators leasing ships were hiring them out below cost(current/ recent situation) just to get some cash in before pesumably going bust!

i think Senator is the first high profile company to hang up its boots, if one may mix such a metaphor for a shipping line!

Brokers like the look of Clarckson..

Clarkson PLC

FORECASTS
2008 2009

Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Panmure Gordon
04-02-09 BUY 38.94 141.04 46.00 25.07 90.78 46.00

Daniel Stewart
30-01-09 BUY 41.70 154.20 46.00 27.40 101.40 46.00

Charles Stanley Securities
15-01-09 BUY 38.60 142.86 44.00 25.50 95.77 44.00

2008 2009
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Consensus 38.76 142.01 46.00 25.30 95.77 46.00

1 Month Change 2.11 10.01 1.23 -2.15 -2.89 0.61
3 Month Change 2.40 11.18 1.39 -13.81 -45.03 -2.57


GROWTH
2007 (A) 2008 (E) 2009 (E)

Norm. EPS 26.88% 28.79% -32.56%
DPS 11.76% 21.05% 0.00%

INVESTMENT RATIOS
2007 (A) 2008 (E) 2009 (E)

EBITDA 28.80m 41.11m 27.06m
EBIT 25.10m m m
Dividend Yield 8.22% 9.96% 9.96%
Dividend Cover 2.90x 3.09x 2.08x
PER 4.19x 3.25x 4.82x
PEG 0.16f 0.11f -0.15f
Net Asset Value PS 195.18p 486.17p 538.10p

A forward P/E of just under 5 for 2009, far too cheap.

so throw your money in there .... i wouldn't and remember i am far closer to the real world of shipping that you

Comment From The TIMES

Stampede by banks to beat bonus crackdown

Pay rises and targets ditched as new chief stamps his mark on Unilever

Business Editor: Trichet needs to follow Britains lead (interest rates); Another day, another boss, another drive (Paul Polman, Unilevers new CEO); In defence of bonuses of contention - It is hard to see how paying forex dealers for good performance could be deemed a reward for failure or how it could encourage the sort of behaviour that led to the banking crisis

Tempus: BG Hold on; Unilever Pass; Compass Group There will be better times to buy

A Tiddler to Watch: Clarkson

Other comment: Coal price could be a bad omen for hard-hit miners

Smaller Companies: YouGov finds a 50% share drop

From todays Times..

Tiddler to watch

Clarkson rose 36p to 498p after Daniel Stewart advised its clients to buy the shipbroker. This follows strong gains in shipping indices as demand from Chinese steelmakers starts to recover. The broker, which has a target price of 700p, said the stock offered exceptional value at current levels.

sorry ... can't paste pix

Some insight into the MD DYOR
http://www.youtube.com/watch?v=DMuO-8S_0Wg&feature=PlayList&p=7638D2A5227C9A40&playnext=1&index=59

Loads err money.

pushing up near days highs again.

32% rise off back of my bonce calculations in 3 days.

bring it on for day 4 and day 5.

well done m8 ... you are right and i am wrong

ehh, come on cyners its never been a case of that.

Plenty of banter on these threads i though you were laid back like me and a bit thick skinned all in the best possible taste.

Highest respect for you.

it's ok pal ..... just a bit fraught at the mo ..... other than market generated

A few nips of the brown nectar over the weekend cyners.

Im off for some now.

have a good one.

cheers GF.

Interesting article in yesterday's Times:

Rush for ships feeds hope of revival in commodities
'A surge in shipping rates for bulk carriers, used to transport cargoes of wheat, coal and iron ore, has created a frisson of excitement about signs of recovery in trade with China.

'The Baltic Dry Index, a measure of freight rates for dry bulk vessels, gained 10 per cent in value yesterday after a 50 per cent increase last week as mining companies scrambled to hire ships to deliver iron ore to China.'

Copy and paste below for full article:

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article5697766.ece

OVER 540P

OVER 600p NOW

CKN Clarkson, just opened a new position here, Dry Baltic Index been hitting highs in recent days chart is georgeous and fundies are superb, a fantastic combination........

"

Fundies........

Clarkson PLC

FORECASTS
2009 2010
Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Panmure Gordon
05-06-09 BUY 21.46 77.20 42.00 24.94 89.74 42.00

Daniel Stewart
03-06-09 BUY 28.80 104.00 42.00 30.80 111.50 42.00

Charles Stanley Securities
15-04-09 BUY 21.70 78.95 42.00 24.20 87.89 42.00

2009 2010
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Consensus 21.57 78.04 42.00 24.59 88.85 42.00
1 Month Change -0.01 -0.91 0.00 -0.34 -1.12 0.00
3 Month Change -3.71 -17.73 -4.00 -3.25 -14.00 -3.00


GROWTH
2008 (A) 2009 (E) 2010 (E)

Norm. EPS 83.25% -61.18% 13.85%
DPS 10.53% 0.00% 0.00%

INVESTMENT RATIOS
2008 (A) 2009 (E) 2010 (E)

EBITDA 47.90m 31.33m 33.98m
EBIT 41.10m m m
Dividend Yield 6.77% 6.77% 6.77%
Dividend Cover 4.79x 1.86x 2.12x
PER 3.08x 7.94x 6.98x
PEG 0.04f -0.13f 0.50f
Net Asset Value PS 368.25p 579.37p 625.40p

trading on a forward P/E of just under 7 to 2010...............WAY UNDERVALUED.

Broker Snap

CKN Clarkson....

Date Broker name New Price Old price target New price target Broker change

01-Jun-09 Daniel Stewart Buy 602.00p 700.00p - Reiteration
14-May-09 Panmure Gordon Buy 567.00p 725.00p - Reiteration

Bullish comment from Pro TAer Zak Mir....

Zak Mir



Reged: 28/06/07
Posts: 859
Re: CLARKSON CKN
#447910 - 09/06/09 03:08 PM Edit Reply Quote



There is an October resistance line projection suggesting a 750p target for CKN on a one month view, even after all the gains, especially while the 10 day moving average now at 608p provides support.

Lovely chart on CKN Clarkson when you have time to analyse it. First a wedge in a uptrend (could even be a flag if I had got my pole in the right position) and then a breakout into a uptrend channel.

Sp just of the floor aswell of the channel and no clear resistance in site...what a beauty. 700p first thing and the we should go on for more.

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SOLD OUT.SORRY.

over 770p.

Goes ex-divi 16th sept '09. Likely to see a little bit of a build up prior to that, imo.

over 830p

over 840p

looking good.

Small move

StockMarketWire.com
Clarkson has warned that profits for 2016 will be materially lower than last time.

The group says that since the annual general meeting, the Clarksea index has fallen a further 10%, so that its average level for the first six months of 2016 was 30% lower than for the first half of 2015.

The Baltic Dry Index has similarly fallen sharply year on year, testing all-time lows during the first quarter of 2016.

This deterioration in freight rates reflects the increase in global economic uncertainty and the continuing imbalance between supply and demand in shipping and offshore.

Clarksons says the recent recovery in the oil price has driven the return of some activity within offshore broking, however the offshore industry remains depressed and will require this recovery to be sustained for some time before confidence returns and meaningful volumes start to come through. Overall transaction volumes within the broking division have continued to grow, but the fall in freight rates and asset values has both impacted revenues and driven the market to be spot focussed with little newbuilding activity. This combined with quiet capital markets and weak investor confidence has reduced activity within the financial division.

Whilst recent strengthening of the US dollar against sterling, if sustained, will offer some limited enhancement to reported profits, the Board nevertheless now anticipates that profits for 2016 will be materially lower than the full year 2015.

The Clarksons business does however remain highly robust, evidenced by the significant growth in volumes within broking, sales growth in research, an encouraging mandate pipeline within the financial division and a strong balance sheet.

The group will release its interim results for the six months ending 30 June on 15 August.

StockMarketWire.com
Clarkson warned on Monday that profits for both the first half and the full year were expected to be materially lower, amid a challenging environment in shipping and offshore capital markets.

'The challenging environment in shipping and offshore capital markets has led to transactions being pushed back within the financial segment and has compounded a quiet period in sale and purchase activity for the group across shipping and offshore,' the firm said.

The firm cited lower freight rates within the tanker market and a fall in the value of the US Dollar as additional headwinds expected to weigh on performance.