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Cash rich shipping group can increase payout and invest in the business
Thursday 17 Aug 2017 Author: Lisa-Marie Janes

Shipping services provider Clarkson (CKN) is planning to drive shareholder returns by investing in the business, despite difficult shipping and offshore markets but should have money left over to distribute to shareholders too.

Clarkson is lining up spending across the group, particularly in its ship broking and finance divisions, and is focusing on improving its technology to increase operational efficiency.

The company is well positioned to sanction this expenditure as it is now debt free and has net funds of £71.4m at its disposal.

Panmure Gordon analyst Colin Smith says the company should also be in a position to drive a big increase in its dividend.

Smith speculates the company will boost the full year dividend by 8% to 70p in the year to 31 December 2017.

Clarkson has faced a challenging backdrop since the demise of US financial firm Lehman Brothers during the financial crisis, hitting demand when the supply of new ships increased. This situation is starting to reverse.

In 2016, global new building orders for vessels over 20,000 deadweight tonnage hit a new low of 217 compared to 1,874 orders in 2008.

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