Shipbroker Clarkson is catching a fresh tailwind
Shipping services group Clarkson (LSE: CKN) has emerged over the last few decades as a global shipbroking franchise, with its shares rising from 90p at the turn of the century to over £50 per share today. Clarkson was founded in 1852 and has been listed on the London Stock Exchange since the 1980s.
Success was not inevitable, though. In the 1990s, Clarkson and its competitor Braemar (LSE: BMS) were navigating a shipping market that had been in the doldrums for over a decade. In 1999, Clarkson reported revenues of £27 million, 30% below the level achieved a decade earlier.
Fortunately for patient shareholders, Clarkson’s management correctly identified a turning point, noting that while reported shipping rates had hit historic lows, an upturn in the global economy was beginning to drive a recovery in freight rates.
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The rise of China, which joined the World Trade Organisation in 2001, caused a massive increase in demand for shipping raw materials such as copper and iron ore. Clarkson was perfectly positioned to capture this growth, with established hubs in London, Singapore and Shanghai.
Braemar’s management steered a different course, explaining in 1999 that the firm needed to “expand activities into non-cyclical marine services” to offset weak freight rates. So Braemar diversified into more stable, but lower-margin activities, such as bunkering (buying oil storage and matching sales to ship operators). This generated impressive revenue growth: in 2007, the bunker trading segment earned £33.4 million (just under half of group revenue) – but at an operating margin well below 0.5%. Eventually, Braemar acknowledged that this was a poor strategic choice, and management disposed of the bunkering business.
Thus Braemar’s unhealthy “diworsification” into stable revenue meant falling margins. Its earnings before interest and taxes (Ebit) margin fell below 15% as the global financial crisis hit, and would continue to decline for another decade. By contrast Clarkson, which remained focused on choppy, but profitable shipbroking activities, expanded Ebit margins to almost 20% just before the financial crisis hit in 2007.
More recently Clarkson suffered a 5% decline in revenue in the financial year ending December 2025, as Donald Trump‘s policies disrupted global trade. However, group Ebit margin stood at 15% in 2025 and the core shipbroking division achieved a 20% margin. The focus on this uneven, but profitable activity had continued to pay well. Clarkson has grown its dividend every year for the last 24 years and a further increase to 115p is forecast for this year. An investor who paid 90p per share in 2000 is now receiving more than their initial investment every year.
Clarkson is a hidden growth engine
Diving deeper tells an even more interesting story. Despite revenue declining in the broking division (roughly three-quarters of group revenue), the much smaller research division grew revenue an encouraging 14% at an almost 40% margin. This division represents a hidden but scalable growth engine where revenue growth feeds directly to the bottom line because the data it collects and sells has already been created through the group’s massive transaction flow.
There are some similarities with the Parameta division of interdealer broker TP ICAP, which was identified by activist investor Justin Hughes as being a hidden gem. Both Parameta and Clarkson’s research divisions sit downstream of high-volume, over-the-counter broker desks, turning transaction data that isn’t publicly available into high-margin, recurring revenue. Using this by-product of their parent companies’ brokerage operations creates near-zero cost of goods sold (Cogs) for their digital subscription services.
Regulation has been a key driver of these divisions. Parameta’s growth has been boosted by the need to demonstrate best execution, which turns the service into an essential compliance requirement. Similarly, environmental and emissions regulations makes Clarkson’s expertise and data more valuable. Currently, only 7% of the global shipping fleet uses alternatives to fossil fuels, although this is expected to treble by 2030. Regulatory pressure to tighten emissions standards is expected to force the early retirement of older vessels, accelerating the need for new ships.
Clarkson, as the market leader in valuations, sale and purchase, is uniquely positioned to advise and finance these multi-billion-pound fleet renewals, through its World Fleet Register. This database of the global merchant fleet was built over decades and contains vessel ownership, specifications, age, order books and trading activity. The group’s other flagship data service is the Shipping Intelligence Network, which offers country profiles and coverage of the complexities affecting shipping markets, such as an assessment framework of the recent closure of the Strait of Hormuz. Over 90% of research division revenue recurs every year, and growth accelerated to 24% year-on-year in the first half of 2026, with the margin improving to over 40%.
Since 2000, Clarkson has been the second-best-performing stock in the FTSE 250, second only to engineering group Goodwin. That said, the eight-figure pay package received by chief executive Andi Case – over £11 million in 2024 – has met with some resistance from institutional shareholders. In part, Case’s pay is high because Case has two roles: while running the group, he also continues to work as a revenue-generating shipbroker, which earns him significant sums in performance-related pay from commissions on broking deals. This is fairly standard in the world of shipbroking, although notably Braemar’s former chief executive James Gundy recently stepped back from managing the company to focus on his (presumably better rewarded) shipbroking role.
Still, institutions would be better to focus their attention on high rewards for failure, such as in the UK banking sector, where there is a long record of bosses receiving high pay despite failing to create value, or even destroying it. The recent outperformance of the banking sector has been caused by a rising tide of supportive macroeconomic variables that has lifted all boats. Conversely, Clarkson’s 5,100% share price increase since January 2000 – versus a flat share price at Braemar over the same time horizon – shows that in shipbroking investors should be happy to reward quality management. Superior strategic choices have led to a huge variance in outcomes.
Clarkson has formidable defences
Yet one risk to the investment case for Clarkson comes from Braemar. In May last year, it unveiled aggressive plans to grow revenues to £200 million by 2030, up from £136 million in the year ending February 2026, including a commitment to hire ten new brokers per year. So far, Clarkson has distributed rewards fairly between brokers and shareholders. However, this is a people business, where the assets walk out the door every evening, so bidding up the price of talent risks a greater share of rewards going to “star players” with the contacts and nous to drive a hard bargain.
That said, at over £600 million, Clarkson’s annual revenue is almost five times that of Braemar’s. The larger group enjoys natural advantages that flow to the market leader, such as superior liquidity and the ability to spread fixed technology costs across a larger revenue base. Clarkson handles roughly one in every ten global shipping fixtures, which has created a powerful network effect: shipowners gravitate to where the most charterers are, and charterers go where the selection of tonnage is widest. Each successful deal reinforces this position.
Braemar seems to have learnt from past mistakes and has combined its revenue goal with a target underlying operating profit margin of 15%. So its expansion is unlikely to spark a fierce bidding war for top talent.
Following the decline in revenue last year, Clarkson’s most recent half year to June was much stronger. Higher demand for chartering services and elevated freight rates provided a helpful climate as it tends to earn a percentage commission on commercial activities. A buoyant market in shipping vessels’ valuation, combined with strong demand for derivatives instruments to help manage risk, also proved helpful.
Revenues jumped 39% to over £414 million in the first half, at a 14% Ebit margin, excluding acquisition-related costs. The company said in August that it expects the full-year outcome to be “materially ahead of market expectations”. Broker Zeus has raised its earnings per share forecast by 14% for both 2026 and 2027 to 279p and 310p. That puts the group on 17 times this year’s forecast and 16 times the following year. Clarkson also enjoys a strong balance sheet, with £155 million of cash at the end of June.
For comparison, Braemar trades on just nine times forecasts for the current financial year and seven times the following year, with a net debt position of just under £3 million at their February year end. At 225p, Braemar’s share price has trod water for 20 years. The valuation looks attractive if management can deliver on revenue and margin aspirations. Yet after many years of disappointing performance – revenue last year was below the level achieved in 2016 – investors’ scepticism is understandable.
Thus Braemar is a turnaround situation, looking to follow the success of its larger rival. Meanwhile, Clarkson has become essential shipping infrastructure, where “key-man risk” of brokers leaving is mitigated by the group’s franchise and data subscription recurring revenue. While Clarkson’s offices are located in St Katharine Docks, just beyond London’s old Roman walls, the long-established broker has formidable defences to protect its market position.
This article was first published in MoneyWeek’s magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
