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Clarkson (CKN) – Finals PTP: £25.6m (£22.1m) Divi: 26p (24p)

At first glance the results look impressive, with a buoyant market supporting a 49% hike in revenue to £173.4 million as well as a 16% rise in taxable profits at £25.6 million. Yet despite the group’s optimism about future prospects, broker Dresdner Kleinwort warns that the shipping cycle is now more likely to weaken than strengthen further.

Continuing litigation claims also pose a problem. An ongoing litigation with two Russian state-owned shipping companies has seen Clarkson set aside £6 million, without any admission of liability. But it has also received a second litigation claim totalling $71 million relating to a year end valuation in 2003, for which no provision has been made, and, according to Dresdner Kleinwort, adds ‘significantly to uncertainty’. The shares responded by falling 7% to 782.5p.

Shares says: Clarkson may feel inspired, but the shares certainly are not and uncertain global economics mean the stock is probably best avoided. AVOID

by: Rachel Robson