In a fast-changing world,
we are leading positive change.
2023 Annual Report
Overview
IFC At a glance
1 A fast-changing world
Strategic Report
10 Chair’s review
12 Chief Executive Officer’s review
16 Financial review
20 Key performance indicators
22 Our business model
24 Our markets
30 Our strategy
32 Business review, including:
32 – Broking
44 – Financial
48 – Support
51 – Research
58 Our stakeholders
60 Section 172 statement
64 Risk management, including:
74 – Task Force on Climate-Related
Financial Disclosures
78 Our impact:
80 – Environmental
84 – Social
98 – Governance
101 – Non-financial and sustainability
information statement
Corporate Governance Report
102 Governance at a glance
103 Chair’s introduction to
Corporate Governance Report
104 Board of Directors
107 Code compliance
108 Corporate Governance Report
114 Nomination Committee Report
120 Audit and Risk Committee Report
128 Directors’ Remuneration Report
145 Directors’ Report
149 Directors’ Responsibilities
Statement
150 Independent Auditors’ Report
Financial statements
157 Consolidated income statement
157 Consolidated statement
of comprehensive income
158 Consolidated balance sheet
159 Consolidated statement of
changes in equity
160 Consolidated
cash flow statement
161 Notes to the consolidated
financial statements
199 Parent Company balance sheet
200 Parent Company statement
of changes in equity
201 Parent Company
cash flow statement
202 Notes to the Parent Company
financial statements
Other information
219 Alternative performance
measures
221 Glossary
224 Five-year financial summary
Forward-looking statements
Certain statements in this Annual Report are
forward-looking. Although the Group believes
that the expectations reflected in these
forward-looking statements are reasonable,
it can give no assurance that these expectations
will prove to have been correct. Because these
statements involve risks and uncertainties, actual
results may differ materially from those expressed
or implied by these forward-looking statements.
The Group undertakes no obligation to update any
forward-looking statements whether as a result
of new information, future events or otherwise.
Alternative performance measures (‘APMs’)
Clarksons uses APMs as key financial indicators to
assess the underlying performance of the Group.
Management considers the APMs used by the
Group to better reflect business performance
and provide useful information. Our APMs include
underlying profit before taxation and underlying
earnings per share. See pages 219 and 220 for
further information on APMs.
Contents
2023 highlights
Revenue*
£639.4m
2022: £603.8m
Underlying profit before taxation*^
£109.2m
2022: £100.9m
Reported profit before taxation
£108.8m
2022: £100.1m
Dividend per share
102p
2022: 93p
* Classed as a key performance indicator. Refer to page 20 for more information.
^ Classed as an alternative performance measure. See below for further details.
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A fast-changing world
In 2023, shipping has had to rise to
the challenge of increasing disruption
and complexity.
The drive to emission reduction
has created a need for fuelling
transition; new advanced technology
has enabled enhanced risk
management, improved efficiency
and data-led decision-making; and
geo-political shifts and climate change
have created focus on energy and
food security irrespective of changing
trade flows and other disruptions.
But navigating change and
complexity is what we do best.
1Clarkson PLC
2023 Annual Report
Overview
Corporate
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statements
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information
At a glance
We enable smarter, cleaner global trade by empowering our clients and
our people to make better informed decisions using our market-leading
technology and intelligence. In doing so, we meet the demands of the
world’s rapidly evolving maritime, offshore, trade and energy markets.
Read more:
Our business model on pages 22 and 23.
24
Countries in which Clarksons operates
64
Clarksons offices
2,000+
Employees
85%
Of global trade carried on ships
1.5 tonnes
Seaborne trade per capita in 2023
12bn tonnes
Of global seaborne trade in 2023
Enabling global trade
At the heart of global shipping
We offer a complete ecosystem of maritime services. Our integrated
offering is powered by intelligence, providing authoritative insight,
industry know-how and smarter solutions.
Share of revenue
2023
£m
2022
£m
Broking 516.8 495.5
Financial 44.1 49.8
Support 56.6 39.0
Research 21.9 19.5
Read more:
Financial review on pages 16 to 19.
Segmental split of underlying
profit before taxation
2023
£m
2022
£m
Broking 121.2 117.6
Financial 6.6 7.8
Support 6.4 5.0
Research 8.4 7.0
Read more:
Business review on pages 32 to 57.
Leading positive change
Fuelling transition
Informing shipping strategies
and innovative solutions
We’re continuing to work with our clients and industry
partners to explore sustainable solutions to the fuelling
transition, which will be vital to the move towards a
lower-carbon future for the maritime industry.
Click to read more at www.clarksons.com/green-transition
Offshore renewables
Investing in our support for the offshore
renewables industry
Our leading offshore renewables team provides
comprehensive services to all stages and sizes of
offshore wind renewable energy projects. We enhanced
our global presence during the year through a new
Edinburgh office and the expansion of our US team.
Click to read more at www.clarksons.com/broking/renewables/
Diversity
Inspiring the next generation of women in maritime
We highlighted stories from women across Clarksons
and held a successful networking event to bring together
women from across the business and drive collaboration
and community.
Click to read more about women at Clarksons
at www.clarksons.com/women-in-shipping
Decarbonisation
Driving CO
2
solutions through collaboration
We joined the Carbon Capture and Storage Association,
contributing to the evolution of this exciting new market
that will drive commercial decarbonisation.
Click to read more at www.clarksons.com/clarksons-joins-ccsa/
Change in our industry is constant. And with an
accelerating green transition, change is increasingly
being driven by new and complex regulation and process.
Our resilience, innovation and understanding of our industry
ensure we can respond to and lead change successfully
and sustainably in an ever-more complex world.
We are leading positive change
2 Clarkson PLC
2023 Annual Report
3Clarkson PLC
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Green transition
Clarity in a
fast-changing
world
The impact
of climate
change
Driving
greener
solutions
Advising on
fleet renewal
decisions
Unlocking
cleaner
energy
Understanding
the regulatory
landscape
The ongoing drought
conditions in the
Panama Canal – a key
waterway with more
than 13,000 transits
per year involving
2.5% of global trade
– continues to disrupt
global trade.
We provide expert
insight into canal transit
restrictions, congestion
times, vessel re-routing,
and its impact on
freight rates.
Read more:
Our markets
on pages 24 to 29.
Business review
on pages 32 to 57.
Our clients are
investing in new and
innovative technologies
that will help drive the
world’s progress
towards lower
emissions. We help our
clients understand and
execute these complex
but vital investments.
Click to read more:
www.clarksons.com/
clarksons-and-hydrogenious/
The average age
of the world fleet is
increasing. And new
CII regulations mean a
third of tonnage could
report D or E ratings,
highlighting the need
for a huge programme
of fleet renewal. With
ship owners needing
to make crucial fleet
renewal decisions,
we’re helping them to
gain clarity on how the
fuelling technology
they choose will
perform, alongside
chartering potential.
Read more:
Our markets
on page 28.
Click to read more:
www.clarksons.com/
news-and-insights/2022/
ammonia-and-the-cuckoo-
in-the-nest/
Offshore renewables
will play a vital role in
the world’s energy
transition. The number
of offshore wind farms
and turbines is growing
rapidly, providing vital
clean energy. We’re
accelerating the
discussion around
investment in offshore
wind, and helping
facilitate the shipping
support and finance
needed.
Read more:
Business review
on pages 32 to 57.
Our impact
on pages 80 to 81.
Click to read more:
www.clarksons.com/
the-future-of-offshore-energy/
Regulation is driving
change. IMO ‘short-term’
measures are
influencing investment
decisions and
operational behaviour,
and with a net zero
commitment for the
first time, regulation
is accelerating.
Our understanding
allows us to guide our
clients through the
increasingly complex
regulatory landscape.
Read more:
Business review
on pages 32 to 57.
Our impact
on pages 80 to 81.
Click to read more:
www.clarksons.com/
green-transition
4 Clarkson PLC
2023 Annual Report
Clarity in a
fast-changing
world
The impact
of climate
change
Driving
greener
solutions
Advising on
fleet renewal
decisions
Unlocking
cleaner
energy
Understanding
the regulatory
landscape
The ongoing drought
conditions in the
Panama Canal – a key
waterway with more
than 13,000 transits
per year involving
2.5% of global trade
– continues to disrupt
global trade.
We provide expert
insight into canal transit
restrictions, congestion
times, vessel re-routing,
and its impact on
freight rates.
Read more:
Our markets
on pages 24 to 29.
Business review
on pages 32 to 57.
Our clients are
investing in new and
innovative technologies
that will help drive the
world’s progress
towards lower
emissions. We help our
clients understand and
execute these complex
but vital investments.
Click to read more:
www.clarksons.com/
clarksons-and-hydrogenious/
The average age
of the world fleet is
increasing. And new
CII regulations mean a
third of tonnage could
report D or E ratings,
highlighting the need
for a huge programme
of fleet renewal. With
ship owners needing
to make crucial fleet
renewal decisions,
we’re helping them to
gain clarity on how the
fuelling technology
they choose will
perform, alongside
chartering potential.
Read more:
Our markets
on page 28.
Click to read more:
www.clarksons.com/
news-and-insights/2022/
ammonia-and-the-cuckoo-
in-the-nest/
Offshore renewables
will play a vital role in
the world’s energy
transition. The number
of offshore wind farms
and turbines is growing
rapidly, providing vital
clean energy. We’re
accelerating the
discussion around
investment in offshore
wind, and helping
facilitate the shipping
support and finance
needed.
Read more:
Business review
on pages 32 to 57.
Our impact
on pages 80 to 81.
Click to read more:
www.clarksons.com/
the-future-of-offshore-energy/
Regulation is driving
change. IMO ‘short-term’
measures are
influencing investment
decisions and
operational behaviour,
and with a net zero
commitment for the
first time, regulation
is accelerating.
Our understanding
allows us to guide our
clients through the
increasingly complex
regulatory landscape.
Read more:
Business review
on pages 32 to 57.
Our impact
on pages 80 to 81.
Click to read more:
www.clarksons.com/
green-transition
5Clarkson PLC
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Green transition
Understanding impact
drives cleaner decisions.
Clarity in a
fast-changing
world
The impact of the green
transition is starting to be
felt now more than ever.
New and significant
regulation came into
effect in 2023, with
the CII introducing an
emissions rating system
for all deep sea vessels.
And from 2024, the EU
ETS has introduced a
price on CO
2
emissions
for European shipping.
Regulation will increase
the need for replacement
as older vessels become
non-compliant and
less competitive.
Alternative newbuild fuel
orders are increasing. By
2026, the number of LNG
fuel-capable vessels on the
water will have doubled.
Investments in methanol,
and now ammonia, fuelling
are also growing. Around a
third of shipping capacity is
now fitted with at least one
form of significant Energy
Saving Technology.
But the ongoing
uncertainty regarding fuel
and technology may also
limit orders and delay the
fuelling transition in some
segments, impacting
market supply and demand.
As the industry finds
its way through the energy
transition, Clarksons
continues to be at the heart
of the conversation and
lead positive change.
4 Clarkson PLC
2023 Annual Report
Understanding the
energy transition
challenges means
we can lead the
change.”
Kenneth Tveter
Head of Green Transition
5Clarkson PLC
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Technology
Clarity in a
fast-changing
world
Transforming
with trust
Harnessing data
to optimise
performance
Unlocking new
possibilities
Changing
consumer
demands
From the impact of
technology on society and
economies, to the growth
in cyber security, data
mining and malicious use,
new technology brings risk
as well as opportunity.
For Clarksons, trust is part of
our currency. The authority
of our data has always been
market-leading, and as we
continue to take strides in
digital innovation, this
remains paramount.
Read more:
Our markets on page 29.
Risk management on pages 64 to 73.
The ability to leverage data
and act on it efficiently will
bring greater competitive
advantage in our industry.
Technology is key.
We invest in technology
and data across all our
business lines – our core
broking teams have tools
for trade, while our brokers
and analysts have access to
proprietary tools, enabling
them to perform their roles
with greater insight and
market knowledge.
Click to read more:
www.clarksons.com/leveraging-
data-for-stronger-client-service/
In the right hands,
the ability to provide
instruction to machine
learning models to
generate an outcome
will unlock efficiencies,
optimise operations,
cut costs and pave the
way for new opportunities.
The environmental
consciousness of the
end-consumer is on the
rise, and manufacturers
need to change gear
to ensure the sentiment
reverberates throughout
the entire supply chain.
Innovations in technology
are making greener supply
chains possible.
Read more:
Our markets on pages 24 to 29.
Business review on pages 32 to 57.
6 Clarkson PLC
2023 Annual Report
Clarity in a
fast-changing
world
Transforming
with trust
Harnessing data
to optimise
performance
Unlocking new
possibilities
Changing
consumer
demands
From the impact of
technology on society and
economies, to the growth
in cyber security, data
mining and malicious use,
new technology brings risk
as well as opportunity.
For Clarksons, trust is part of
our currency. The authority
of our data has always been
market-leading, and as we
continue to take strides in
digital innovation, this
remains paramount.
Read more:
Our markets on page 29.
Risk management on pages 64 to 73.
The ability to leverage data
and act on it efficiently will
bring greater competitive
advantage in our industry.
Technology is key.
We invest in technology
and data across all our
business lines – our core
broking teams have tools
for trade, while our brokers
and analysts have access to
proprietary tools, enabling
them to perform their roles
with greater insight and
market knowledge.
Click to read more:
www.clarksons.com/leveraging-
data-for-stronger-client-service/
In the right hands,
the ability to provide
instruction to machine
learning models to
generate an outcome
will unlock efficiencies,
optimise operations,
cut costs and pave the
way for new opportunities.
The environmental
consciousness of the
end-consumer is on the
rise, and manufacturers
need to change gear
to ensure the sentiment
reverberates throughout
the entire supply chain.
Innovations in technology
are making greener supply
chains possible.
Read more:
Our markets on pages 24 to 29.
Business review on pages 32 to 57.
7Clarkson PLC
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Technology
Technological innovations
will unlock new possibilities,
address complex challenges
and drive sustainable
growth and societal impact.
How can shipping leverage
new technologies in a way
that progresses the
industry? The ability to
optimise voyage routes,
use decision-modelling
tools for fleet utilisation,
calculate voyage speeds
to coincide with regulatory
requirements, weather
patterns and port
congestion is already a
unique advantage to the
Clarksons offering and how
we work with clients.
But staying curious and
innovative means we can
continue to meet the needs
of global trade whilst
encouraging collaboration
among stakeholders.
Success and speed of
adoption will be dependent
on trust. Shipping must use
innovative technology to
digitalise its workflows
but needs trusted partners
that understand, not just
technology, but also
our industry.
Clarity in a
fast-changing
world
Changing performance,
transforming possibilities.
6 Clarkson PLC
2023 Annual Report
By staying curious
and innovative,
we lead positive
change.”
Eli Perpinyal
Head of Digital Transformation
7Clarkson PLC
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Geo-political complexity
Clarity in a
fast-changing
world
A return
to growth
Greater
distances
Complexity
of sanctions
Growing
disruption
Shipping is at the heart of
global trade, with economic
development and
population trends driving
growth. Seaborne trade
volumes returned to growth
in 2023, expanding by 3%
year on year to reach 12.3bn
tonnes. Geo-political events
and underlying trends
towards longer-haul trading
routes have driven even
higher tonne-mile growth of
5%, the highest levels for six
years. We advise our clients
how this growth will impact
markets and we also benefit
from expanded volumes
as we play our vital role
in enabling global trade.
Read more:
Our markets on pages 24 to 29.
Business review on pages 32 to 57.
The Russia-Ukraine conflict
has led to a fundamental
redistribution of trade
flows, with Russian oil
heading further east and
European imports pivoting
towards longer-haul
suppliers. Recent Red Sea
disruption is also diverting
trade, creating additional
shipping demand and
volatile freight and
charter markets.
Clarksons’ global presence
and insights mean we can
continue to help our clients
manage this bifurcation
of trade.
Read more:
Our markets on page 25.
Driven by growing
geo-political tension,
an increasingly complex
sanctions and compliance
regime is impacting all
aspects of the shipping
industry.
Our deep investments
in legal and compliance
expertise and systems
allow us to manage and
facilitate trade in a rapidly
changing geo-political
and sanctions world.
Read more:
Our impact on pages 98 to 100.
Since Russia’s invasion
of Ukraine, the shipping
industry has faced huge
disruption, from immediate
operational stress to
fundamental changes
in trade patterns
surrounding natural gas
supply and grain out of
the region. We support
our clients in managing
this disruption through
our deep understanding
and global scale.
Read more:
Our markets on page 25.
Business review on pages 32 to 57.
8 Clarkson PLC
2023 Annual Report
Clarity in a
fast-changing
world
A return
to growth
Greater
distances
Complexity
of sanctions
Growing
disruption
Shipping is at the heart of
global trade, with economic
development and
population trends driving
growth. Seaborne trade
volumes returned to growth
in 2023, expanding by 3%
year on year to reach 12.3bn
tonnes. Geo-political events
and underlying trends
towards longer-haul trading
routes have driven even
higher tonne-mile growth of
5%, the highest levels for six
years. We advise our clients
how this growth will impact
markets and we also benefit
from expanded volumes
as we play our vital role
in enabling global trade.
Read more:
Our markets on pages 24 to 29.
Business review on pages 32 to 57.
The Russia-Ukraine conflict
has led to a fundamental
redistribution of trade
flows, with Russian oil
heading further east and
European imports pivoting
towards longer-haul
suppliers. Recent Red Sea
disruption is also diverting
trade, creating additional
shipping demand and
volatile freight and
charter markets.
Clarksons’ global presence
and insights mean we can
continue to help our clients
manage this bifurcation
of trade.
Read more:
Our markets on page 25.
Driven by growing
geo-political tension,
an increasingly complex
sanctions and compliance
regime is impacting all
aspects of the shipping
industry.
Our deep investments
in legal and compliance
expertise and systems
allow us to manage and
facilitate trade in a rapidly
changing geo-political
and sanctions world.
Read more:
Our impact on pages 98 to 100.
Since Russia’s invasion
of Ukraine, the shipping
industry has faced huge
disruption, from immediate
operational stress to
fundamental changes
in trade patterns
surrounding natural gas
supply and grain out of
the region. We support
our clients in managing
this disruption through
our deep understanding
and global scale.
Read more:
Our markets on page 25.
Business review on pages 32 to 57.
9Clarkson PLC
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Geo-political complexity
Trade continues to grow,
reaching the equivalent
of 1.5 tonnes for every
person on the planet.
Asia remains a growth
driver for maritime trade
while energy exports from
the US and Middle East
continue to expand.
But geo-political tensions
are increasingly changing
and disrupting trade
patterns, influencing
our markets every day.
Understanding this new
complexity is vital to our
clients. From assessing
transactional risk to
modelling impacts
on market supply and
demand, we help them
understand and manage
this growth and disruption.
The speed, volume and
complexity of changes
in international sanctions
is growing. And as a truly
global business at the heart
of trade, our industry is
being deeply impacted.
Clarksons’ continued
investment into expert
legal and compliance
resource across our
network ensures we
remain at the forefront
of understanding and
managing this change.
Clarity in a
fast-changing
world
Growing complexity,
managing disruption.
8 Clarkson PLC
2023 Annual Report
We invest in
technology and
resources in order
to manage risk and
empower, reassure
and protect our
stakeholders.”
Sandra Rosignoli
Group General Counsel
and Head of Compliance
9Clarkson PLC
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Overview
As the Chair of Clarkson PLC, I am
privileged to report another set of
record results. As I reflect on the
drivers of this performance, despite
all the disruptions to shipping faced
throughout the year, I believe it comes
down to a number of key factors, the
seeds of which were planted many
years ago. For a number of years,
Clarksons has consistently invested
in line with its strategy to build breadth
and depth of services to its clients
with leading positions in each
segment. As a result, it has created
a truly global company with local
teams across all the key shipping
geographies which are intrinsically
connected to those localities.
Over this time, Clarksons has also built
a large market data and intelligence
capability and a technology platform,
providing best-in-sector tools for
trade so our outstanding colleagues
can offer clients the best, most
informed advice. We have strategically
invested in the trends which drive our
industry, whether it be the financing
of the industry or, more recently, in
shipping’s green transition. With global
trade continuing to grow in both
volume and complexity, these strategic
pillars of Clarksons are providing our
clients with sector-leading advice,
market intelligence and capabilities.
Results
The results for 2023 reflect the
strength and diversity of our business
model, as well as our ability to adapt
to changing market conditions.
Revenue increased by 5.9% to
£639.4m, driven by strong growth
in our Broking, Support and Research
divisions, as well as responsible
treasury management. Underlying
profit before taxation
1
increased by
8.2% to £109.2m. We have maintained
a strong balance sheet, with net assets
of £456.6m (2022: £413.2m) and free
cash resources
1
of £175.4m as at
31 December 2023 (2022: £130.9m).
Dividend
In line with our progressive dividend
policy, the Board has recommended
a final dividend of 72p per share,
bringing the total dividend for 2023
to 102p per share, an increase of 10%
compared to 2022. This reflects our
confidence in the future prospects
of the Group and our commitment
to continued delivery of shareholder
returns. We are proud of our dividend
growth track record, 2023 being
our 21st year of consecutive
dividend increases.
Chair’s review
Another set
of record results
Consistent investment
in our strategy has
positioned us well.
Laurence Hollingworth
Chair
10 Clarkson PLC
2023 Annual Report
People
Our people are unquestionably
our most important and valuable asset
and the key to our success. We have
a talented, diverse and dedicated
team of over 2,000 employees across
more than 60 offices in 24 countries,
who share our vision and values. We
continue to invest in their development,
wellbeing and engagement, as well
as in attracting and retaining the best
talent in the industry. Our specialist
teams are deeply embedded in their
markets, enabling us to retain our
market-leading positions across
each market segment. I would like
to take this opportunity to thank
all my colleagues for their hard work,
commitment and dedication to both
Clarksons and to our clients.
Giving back
We are proud of our long-standing
tradition of contributing to the
communities where we operate and
the causes we care about. In 2023,
through The Clarkson Foundation, we
made donations to various charitable
initiatives, both at home and around
the world. We have also supported
many of our employees’ volunteering
efforts throughout the year.
We are also leading positive change
by continuing to invest in the growth
of our Green Transition team, which
is importantly helping our clients
to reduce the impact of shipping
on the environment.
Board
I am grateful to my fellow Board
members, whose strengths and
diversity of experience bring a range
of skills and perspectives to the
boardroom table. In February 2024,
Birger Nergaard had served nine years
on the Clarksons Board. He has agreed
to stay on the Board until our AGM
in May 2024 where he will not be
standing for re-election. A search
for a new non-executive director has
commenced and we will make a further
announcement when appropriate.
We thank Birger for his important
contribution to the development and
governance of the Group and wish
him well for the future.
Outlook
We are optimistic about the route
ahead of us. Sector trends remain
favourable, global trade continues
to grow in both scale and complexity,
and the green transition in shipping
is moving ahead apace. We believe
that Clarksons is well-positioned
to capitalise on these trends and
opportunities, with a consistent and
clear strategy, and a strong market
position serving a loyal client base
which is having to navigate more
challenges. Sustained investment in
our strategy has given us a competitive
edge. With a record forward order
book of secured 2024 revenues of
US$217m, the Board looks to the
future with confidence.
I would like to take this opportunity
to thank my colleagues, our clients
and our shareholders for their support
as Clarksons continues to play a
critical role in powering, feeding and
connecting the world, regardless of
the unexpected challenges the trading
world presents. Clarksons is an
outstanding business.
Laurence Hollingworth
Chair
1 March 2024
Strong growth
We are a consistently profitable
and cash-generative business
Momentum
We continue to invest to build
on our position as the market
leader across our core sectors
Experience
We provide best-in-class advice
and service to all our clients
by having the best people
Track record
This is our 21st year of consecutive
dividend increases
Investment
proposition
Read more:
Governance on pages 102 to 149.
1 Classed as an APM. See pages 219 and 220
for further information on APMs.
11Clarkson PLC
2023 Annual Report
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2023 was a year of disruption in the
maritime markets and I am enormously
proud of, and grateful to, my colleagues
across the business, who have
together achieved another record
year. Seaborne trade has continued
to grow, and the increase in shipping
demand has been exacerbated by
tonne-mile impact arising from a
variety of disruptions, be they climate
or geo-political-related. Our results
reflect our resilience, agility, and
market leadership as we provide
integrated advice, intelligence and
services to clients, helping them
make better decisions in increasingly
complex times.
We have highlighted the impact
of supply and demand dynamics
in the shipping industry for the past
few years, and the supply side remains
tight in most sectors. Shipbuilding
capacity is limited, the cost of building
new vessels has risen with increased
input costs, and financing is expensive.
The green transition and the need
for alternate-fuelled ships has
exacerbated the squeeze, with owners
being hesitant to commit to newbuilds
while uncertainty remains about which
fuelling technology to move forward
with. As a result, the average age of
the global fleet is increasing. The
global fleet grew by just 3% during the
year, and the global orderbook, which
is still only 12% of the fleet, is highly
skewed towards container and gas in
the near term, which is likely to result
in constraints for other markets.
Demand-supply dynamics have
supported various growth drivers
including global seaborne trade,
increased complexity in the energy
supply chain, global economic growth
and rising global energy consumption.
Climate, environmental issues and the
green transition have played a part
here too. Vessels are being run at
reduced speeds to lower emissions
as corporates and consumers intensify
their scrutiny on carbon emissions,
and reduced water levels in the
Panama Canal have slowed the
passage of ships through the waterway
and forced many to take alternative,
longer routes. The inclusion of shipping
in the EU’s ETS has created even
greater demand for vessels, both now
and for the future, which meet the
requirements of both customers, who
are demanding more carbon-efficient
journeys, and the regulators.
A year of global
uncertainty
Guiding our clients
through an ever-more
complex world.
Chief Executive Officer’s review
Andi Case
Chief Executive Officer
12 Clarkson PLC
2023 Annual Report
The shipping markets have also
had little respite from geo-political
challenges since the turn of the decade.
Disruptions to trade routes in any form
pose challenges that reach far beyond
the world of shipping. The need for
the movement and surety of food,
energy and goods is paramount to
keeping both businesses and countries
moving globally. It is in times such as
these that the shipping industry has
to adapt to meet new challenges.
Clarksons’ data and intelligence,
market coverage, flexibility and depth
of connectivity ensures that our clients
have the tools and information to
make the best decisions and maintain
trade flows as efficiently as possible.
Broking
The Broking division had another
successful year. Energy shipping led
the way, with gas, tankers, specialised
products, offshore and car carriers all
experiencing strong conditions and
dry bulk and containers freight rates
rallying later in the year.
As global trends evolve, Clarksons’
strategy to invest in all areas of
shipbroking has ensured that we are
able to support our clients across both
mainstream and more niche markets,
in every vertical. Within the car carrier
market, electric vehicle manufacturers
and their customers are increasingly
requiring carbon-neutral delivery of
both components and end products,
and Clarksons’ expertise in the green
transition has enabled us to assist
our clients’ investment into this
important market.
The offshore sector has seen a
recovery this year as global disruption
to energy supplies has created a
buoyant market in which increased
utilisation rates have led to a supportive
rate environment. When Clarksons
acquired RS Platou in 2015, we became
the world’s largest offshore broker with
a team of unrivalled scale and expertise
in the marketplace. This market-leading
position now optimally positions us
to capitalise on the sector recovery in
2024 and beyond as long-term targets
for energy security, offshore supply
and renewable energy are becoming
increasingly important.
The sale and purchase team
had another very successful year
as demand for secondhand vessels
was high, and we delivered strong
newbuilding activity within the
Group. Clarksons’ market-leading
global teams and analysts have again
assisted our clients with their strategy
and execution.
Segmental profit before taxation from
Broking was £121.2m, up £3.6m over
the year, with a margin of 23.5%.
Financial
The Financial division had a more
challenging year as the real estate
sector and global capital markets
remained quiet. Many clients in shipping
have taken advantage of the markets
to pay down debt, however the team
has been involved in most of the
sizeable transactions in the shipping
industry and continues to develop
and evolve its offering to meet clients’
needs. The Financial division plays
a critical role in Clarksons’ integrated
offering for clients and secures
Clarksons’ position as the only full
service provider in the sector.
The Financial division produced a
segmental profit before taxation of
£6.6m in 2023, compared with £7.8m
in 2022.
13Clarkson PLC
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Support
The Support division in the UK, EU
and Egypt had an excellent 12 months
as its agency, customs clearance,
canal transit and Gibb Group, its
PPE and safety & survival supplier,
all performed very well. Clarksons Port
Services acquired DHSS early in 2023.
This business is now fully integrated
and has exceeded management’s
expectations at the time of the
acquisition. Investment in office and
warehouse facilities in Aberdeen has
introduced new technology and
capacity, enabling us to serve more
clients and work more efficiently.
The Support division produced
a segmental profit before taxation
of £6.4m and a 11.3% margin in 2023
(2022: £5.0m and 12.8%).
Research
Clarksons Research is renowned
as the standard bearer across the
industry, with the division delivering
proprietary data to both our teams
and our clients to enable better
decision-making. The quality of
the team’s unparalleled analysis and
understanding of global megatrends
and trade complexities, including
the green transition, energy transition
and fleet evolution, has resulted in
recurring revenues in excess of 85%
as clients seek consistently high-quality
data and commentary to manage their
business decisions.
The division increased segmental
profit before taxation by 20.0%
to £8.4m (2022: £7.0m).
Sea
We are very pleased with the progress
the Sea platform has made this year
as regulation, risk requirements and
increasing trade complexities have led
clients to seek improved governance
and efficiencies in their contract
management. Our investment in Sea
has created an opportunity from this
market trend. Revenue, both one-off
and recurring, has increased, and
the volume of contracts fixed on
the platform continues to rise.
We acquired MarDocs and brought
Recap Manager back into the business
over the period, further accelerating
Sea’s progress in digitising and
managing chartering workflows
from pre-fixture negotiation to
at-fixture documentation.
Chief Executive Officer’s review continued
14 Clarkson PLC
2023 Annual Report
Outlook
The business today is a reflection
of two decades’ investment in our
strategy, and we are confident in
our outstanding team, our breadth
of market-leading services, our
technologies and our geographic reach
to meet the growing needs of our
clients in a world which is ever-more
complex. We nurture long-term
relationships with clients and we have
built a business which helps support
them with their decision-making.
These investments have set the
foundations for the business into
the future and we are optimistic in
the outlook for Clarksons in the near,
medium and long term. We are
unwavering in our commitment to
growth and our strong forward order
book for delivery in 2024 only, and
which stands at US$217m, together
with our much larger forward order
book which stretches further into the
future, gives us growing forward
visibility and the confidence to continue
to invest in our capabilities across the
business. Our strategy of investing in
market-leading positions, pioneering
technology, top teams, and continually
increasing the breadth and depth of
our advisory capabilities has optimally
positioned us to capture future
opportunities in the global shipping
markets. We will continue all elements
of this investment strategy and seek
further opportunities for M&A.
Supply and demand dynamics and the
impact of the green transition, which
is still in its early stages, ongoing trade
disruptions and other geo-political,
economic and environmental
challenges will require more insights,
experience, advice and connectivity
than ever before. Clarksons is uniquely
positioned to help guide its clients
through this challenging and
ever-evolving environment.
Andi Case
Chief Executive Officer
1 March 2024
15Clarkson PLC
2023 Annual Report
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Financial
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Financial review
Introduction
The Group delivered another excellent
financial performance in 2023, with
revenue of £639.4m (2022: £603.8m)
and underlying profit before taxation
1
of £109.2m (2022: £100.9m), both
ahead of the comparative period.
Underlying basic earnings per share
1
grew 9.9% to 275.0p (2022: 250.3p).
Reported profit before tax and basic
earnings per share were £108.8m
(2022: £100.1m) and 275.2p
(2022: 247.9p) respectively. In line
with the progressive dividend policy,
the recommended full year dividend
of 102p, as described in more detail
on page 18, represents the 21st
consecutive year of growth.
Free cash resources
1
increased to
£175.4m (2022: £130.9m); the Group’s
strong cash-generative position
enables us to continue investing in
the best people, market intelligence
and technology to support and advise
our clients. The Group also actively
pursues M&A activity where this is
complementary to the broader strategy.
2023 performance overview
The Broking division performed
strongly, with revenues of £516.8m
(2022: £495.5m) representing an
increase of 4.3%. The division
enhanced its market-leading position
across every segment of shipping
and remains well placed to advise
clients in the face of ongoing trade
disruptions, environmental concerns
and geo-political changes affecting
the industry. The division generated
a segmental profit of £121.2m
(2022: £117.6m) at a margin of 23.5%
(2022: 23.7%).
Energy-related markets performed
strongly in 2023, including gas,
tankers and specialised products.
Offshore markets also performed well,
supported by concerns around energy
security and a focus on renewable
alternatives. The environment was
more challenging for freight rates
in dry cargo and containers, although
these remain above historical levels
and saw improvement into 2024
following disruption to Red Sea
trade routes.
Jeff Woyda
Chief Financial Officer & Chief Operating Officer
Another year of record
financial performance
Strong cash
generation enables
us to continue our
progressive dividend
policy for the 21st
consecutive year.
16 Clarkson PLC
2023 Annual Report
Increased scale and complexity of
global trade, higher asset utilisation
and environmental concerns created
the backdrop for strong asset pricing
and another successful year for the
sale and purchase team. We continue
to support clients with their asset
investment strategies for both new
and secondhand vessels, aligned
to the wider industry focus on the
green transition.
The Financial division reported
revenues of £44.1m (2022: £49.8m).
A challenging economic backdrop
and increase in interest rates reduced
revenue and profitability from real
estate and project finance business.
This reduction was partially offset
by growth in banking where, despite
more challenging capital markets, the
division increased revenue, focused
in M&A advisory. The offshore energy
services team also had a strong year,
executing a range of transactions for
clients following increasing investor
confidence. The division generated
a segmental profit of £6.6m
(2022: £7.8m) for the year.
In Support, both revenue and segmental
profit increased compared to the
previous year at £56.6m (2022: £39.0m)
and £6.4m (2022: £5.0m) respectively.
The division’s core agency business
performed well in both the UK and
Egypt, the latter benefiting from
strategic partnerships with major
clients. Gibb Group also performed
very strongly, investing in new facilities
and people to meet strong client
demand for specialist tools and safety
equipment for the offshore industry.
The division benefited from new
business opportunities following the
acquisition of DHSS, which contributed
£10.8m of revenue during the year.
The Research division reported
revenue of £21.9m (2022: £19.5m)
and a segmental profit of £8.4m
(2022: £7.0m) following continued
investment in market intelligence,
expanding both the breadth and
depth of coverage and insight into
evolving market trends. In particular,
the division’s strategy to provide
leading data and insights around
the green transition evolved in 2023,
meeting strong client appetite to
understand the maritime sector’s
decarbonisation pathway. As a market
leader in its sector, the division remains
well placed to provide high-quality
information and analysis to clients,
enabling them to make the best
decisions for their business.
Administrative expenses
The Group incurred underlying
administrative expenses
1
of £508.8m
(2022: £481.2m), representing an
increase of 5.7%. The main driver
of this increase was variable
compensation, aligned to the
improvement in underlying
profitability. In addition, the Group
continued to invest in new people
and teams, in training and developing
our existing talent, in expanding our
product footprint and in developing
market-leading tools and intelligence.
We remain committed to investing in
all areas of the business to ensure that
we can service the growing needs
of our clients globally.
Acquisitions
At the beginning of the year, the
Group completed the acquisition
of DHSS, a renewables-focused
port services business based in the
Netherlands for an initial consideration
of £4.1m. DHSS (now rebranded to
Clarkson Port Services B.V.) has
had a successful year, exceeding
management’s first-year expectations
and making a meaningful contribution
to the Support division’s segmental
performance. The business increases
the breadth of our offering in the
offshore renewables sector, as part of
our wider investment and focus on the
green transition across the business.
The Group also invested in Sea during
the year, adding the MarDocs digital
platform for consideration of £1.2m.
In addition, the commercial
management of Recap Manager
was brought back into the Group
following an agreement with the
London Tanker Broker Panel. Both
transactions complement the Setapp
and Chinsay acquisitions made in
2022 and leave the Group strongly
positioned for growth in this area.
In November 2023, the Group
expanded its global coverage in dry
cargo broking with the acquisition
of a new team in Rio de Janeiro to
complement the existing offshore and
specialised product expertise locally.
Acquisition-related costs of £2.6m
(2022: £0.8m), which include the above
transactions, have been disclosed
separately in the consolidated
income statement, and relate to
the amortisation of intangibles and
variable remuneration recognised
over the employee service periods.
We estimate acquisition-related costs
for 2024 to be £2.1m assuming no
further acquisitions are made.
Financial performance
Revenue
£639.4m
2022: £603.8m
Reported profit before taxation
£108.8m
2022: £100.1m
Underlying profit before taxation
1
£109.2m
2022: £100.9m
Dividend per share
102p
2022: 93p
1 Classed as an APM. See pages 219 and 220
for further information on APMs.
17Clarkson PLC
2023 Annual Report
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information
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2022
2023
2021
0
10
20
30
40
50
60
70
80
90
110
100
Final Interim Deferred 2019 final dividend paid as 2020 interim dividend
18
25
32
36
40
42
43
47
50
51
56
60
62
65
73
78
79
75
11
16
22
24
26
26
27
30
32
33
37
39
40
43
50
51
53
54
84
57
93
64
102
72
7
9
10
12
14
16 16
17
18 18
19
21
22 22
23
24
25
27
29
30
25
Financial review continued
Dividend
The Board is recommending a
final dividend in respect of 2023
of 72p (2022: 64p) which, subject
to shareholder approval, will be paid
on 24 May 2024 to shareholders on
the register at the close of business
on 10 May 2024.
Consistent
performance
in a changing
world
Together with the interim dividend
in respect of 2023 of 30p (2022: 29p),
this would give a total dividend of
102p for 2023, an increase of 10%
on 2022 (2022: 93p) and representing
the 21st consecutive year the Group
has increased returns to shareholders.
In reaching its decision, the Board
took into consideration the Group’s
2023 performance, balance sheet
strength, ability to generate cash
and forward order book.
Dividend per share (pence)
2003
US and UK send
troops into Iraq,
marking the start
of the Iraq War
2020
The World Health
Organization
declares the
worldwide
outbreak of
COVID-19 a
pandemic,
triggering global
lockdowns and
recessions
2016
The UK votes
to leave the EU,
triggering the
process which
culminates in
‘Brexit’ in
January 2020
2015
The Paris
Agreement is
adopted with
the goal of
limiting the
global average
temperature
increase in
this century
2007
Apple debuts
the iPhone,
putting the
internet in our
pockets and
bringing instant
news and
messaging,
wherever we are
2008
The global
financial
crisis hits, leading
to a protracted
downturn in the
world’s economy
2004
Social media
platform
Facebook is
launched,
revolutionising
the way we
communicate
and share
information
18 Clarkson PLC
2023 Annual Report
Exceptional items
In December 2023, the Group
completed the sale of an industrial
unit that it had owned for several years.
The property’s favourable location
as part of a wider site redevelopment
meant a sale in excess of market
value was achieved, which resulted
in an exceptional gain of £3.5m after
transaction fees and costs. The Group
donated £1.3m of the proceeds to
The Clarkson Foundation for use in
charitable projects. The activities of
The Clarkson Foundation are described
in more detail on pages 92 to 97.
An exceptional net gain of £2.5m
including tax credits of £0.3m has been
disclosed separately in the consolidated
income statement.
Finance income and costs
The Group reported finance income of
£10.5m (2022: £1.9m), benefiting from
active treasury management, a high
interest rate environment and strong
underlying cash generation from the
business. Finance costs remained at
£2.2m (2022: £2.2m) and are mainly
comprised of interest expenses on
lease liabilities from the Group’s
application of IFRS16.
Taxation
The Group reported an underlying
effective tax rate
1
of 21.4%
(2022: 20.4%). The Group’s underlying
tax rate remains stable, with the lower
rate reported in 2022 including a
one-off US tax credit. The effective
tax rate is reflective of the broad
international operations of the Group.
The Group’s reported effective tax
rate was 21.1% (2022: 20.5%).
Foreign exchange
The average sterling exchange
rate during 2023 was US$1.25
(2022: US$1.23). At 31 December
2023, the spot rate was US$1.27
(2022: US$1.21).
Free cashflow
The Group ended the year with cash
balances of £398.9m (2022: £384.4m)
and a further £39.9m (2022: £3.1m)
held in short-term deposit accounts
and government bonds, classified
as current investments on the
balance sheet.
Net cash and available funds
1
, being
cash balances after the deduction
of the total cost of accrued bonuses,
at 31 December 2023 were £201.1m
(2022: £161.7m). The Board uses this
figure as a better representation of
the net cash available to the business
since bonuses are typically paid after
the year-end, hence an element of the
year-end cash balance is earmarked
for this purpose. It should be noted
that accrued bonuses include amounts
relating to the current year and
amounts held back from previous years
which will be payable in the future.
A further measure used by the
Board in taking decisions over capital
allocation is free cash resources
1
, which
deducts monies held by regulated
entities from the net cash and available
funds
1
figure. Free cash resources
1
at 31 December 2023 were £175.4m
(2022: £130.9m).
In addition to these free cash resources
1
,
the Group has a strong balance sheet
and has consistently generated an
underlying operating profit and good
cash inflow. Management has stress
tested a range of scenarios, modelling
different assumptions with respect
to the Group’s cash resources and,
as a result, continues to adopt the
going concern basis in preparing the
financial statements. See pages 72
and 73 for further details.
Balance sheet
Net assets at 31 December 2023 were
£456.6m (2022: £413.2m). The balance
sheet remains strong, with net current
assets and investments exceeding
non-current liabilities (excluding pension
assets and lease liabilities as accounted
for under IFRS 16 ‘Leases’) by £206.5m
(2022: £163.6m). The Group’s pension
schemes had a combined surplus
before deferred tax of £13.4m
(2022: £15.4m).
Forward order book (‘FOB’)
The Group earns some of its
commissions on contracts where the
duration extends beyond the current
year. Where this is the case, amounts
that can be invoiced during the
current financial year are recognised
as revenue accordingly. Those amounts
which are not yet invoiced, and
therefore not recognised as revenue,
are held in the FOB. In challenging
markets, such amounts may be
cancelled or deferred into later periods.
The Directors review the FOB at
the year-end and only publish the
FOB items which will, in their view,
be invoiced in the following 12 months.
At 31 December 2023, this estimate was
US$217m (31 December 2022: US$216m).
Subsequent Events
In February 2024, the Group
completed the acquisition of Trauma
& Resuscitation Services Limited.
The investment increases our service
offering to the oil and gas, marine and
renewable energy sectors through the
provision of market-leading advanced
first aid training for the offshore
wind sector.
Alternative Performance Measures
(‘APMs’)
Clarksons uses APMs as key financial
indicators to assess the underlying
performance of the Group.
Management considers the APMs
used by the Group to better reflect
business performance and provide
useful information. Our APMs include
underlying profit before taxation,
underlying earnings per share,
net funds and free cash resources.
See pages 219 and 220 for further
information on APMs.
Jeff Woyda
Chief Financial Officer
& Chief Operating Officer
1 March 2024
1 Classed as an APM. See pages 219 and 220
for further information on APMs.
19Clarkson PLC
2023 Annual Report
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Financial
statements
Strategic
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Other
information
2021 2022
2023
£443.3m
£603.8m
£639.4m
Key performance indicators
Our financial indicators show
our progress in delivering
against our strategy to create
long-term sustainable value
for all stakeholders.
Definition
Revenue in sterling equivalent,
translated at the rate of exchange
prevailing on the date of the
transaction. We have four revenue
segments: Broking, Financial,
Support and Research.
Definition
Profit before taxation, exceptional items
and acquisition-related costs as shown
in the consolidated income statement.
Definition
Profit after taxation and
before exceptional items and
acquisition-related costs attributable
to equity holders of the Parent
Company divided by the weighted
average number of ordinary shares
in issue during the year.
Definition
Directors’ best estimate of
commissions to be invoiced over
the following 12 months as principal
payments fall due.
Why it is important for Clarksons
Revenue drives the business,
resulting in cash generation and
rewards to stakeholders.
Why it is important for Clarksons
The Board considers that this
measurement of profitability provides
stakeholders with information on trends
and performance, before the effect of
exceptional items, acquisition-related
costs and different tax regimes around
the world.
Why it is important for Clarksons
This measure shows how much
money the Group is generating for its
shareholders. It takes into consideration
changes in profit and the effects of
issuance of new shares but excludes
the impact of exceptional items and
acquisition-related costs. It is an
important variable in determining
our share price.
Why it is important for Clarksons
The FOB gives a degree of forward
visibility of income.
Performance in 2023
Revenue increased by 5.9% from the
prior year with growth in the Support
and Research segments and a strong
performance in the Broking segment
in particular. The Financial segment
experienced a tougher year.
Performance in 2023
This increased by 8.2% from the
prior year driven by revenue growth,
increased investment return and
effective cost management across
the Group.
Performance in 2023
This increased by 9.9% in line
with the growth in underlying profit
before taxation
1
and a reduced
minority interest.
Performance in 2023
The FOB for the next 12 months
was comparable to the prior year
with strong freight rates across key
markets, an increased focus on period
business across all segments and
increased newbuilding business driven
by the green transition, leading to
more long-term fixtures executed.
Read more:
Note 3 of the consolidated financial
statements on pages 170 and 171.
Read more:
Financial review on pages 16 to 19.
Read more:
Note 8 of the consolidated financial
statements on page 176.
Read more:
Business review on pages 32 to 57.
Revenue
£639.4m
Whilst we use non-financial metrics
within the business, such as in relation
to employment matters, we do not
use non-financial KPIs to measure the
strategic performance of the Group.
1 Classed as an APM. See pages 219 and 220
for further information on APMs.
20 Clarkson PLC
2023 Annual Report
2021 2022
2023
£69.4m
£100.9m
£109.2m
2021 2022
2023
165.6p
250.3p
275.0p
2021 2022
2023
US$165m
US$216m
US$217m
Definition
Revenue in sterling equivalent,
translated at the rate of exchange
prevailing on the date of the
transaction. We have four revenue
segments: Broking, Financial,
Support and Research.
Definition
Profit before taxation, exceptional items
and acquisition-related costs as shown
in the consolidated income statement.
Definition
Profit after taxation and
before exceptional items and
acquisition-related costs attributable
to equity holders of the Parent
Company divided by the weighted
average number of ordinary shares
in issue during the year.
Definition
Directors’ best estimate of
commissions to be invoiced over
the following 12 months as principal
payments fall due.
Why it is important for Clarksons
Revenue drives the business,
resulting in cash generation and
rewards to stakeholders.
Why it is important for Clarksons
The Board considers that this
measurement of profitability provides
stakeholders with information on trends
and performance, before the effect of
exceptional items, acquisition-related
costs and different tax regimes around
the world.
Why it is important for Clarksons
This measure shows how much
money the Group is generating for its
shareholders. It takes into consideration
changes in profit and the effects of
issuance of new shares but excludes
the impact of exceptional items and
acquisition-related costs. It is an
important variable in determining
our share price.
Why it is important for Clarksons
The FOB gives a degree of forward
visibility of income.
Performance in 2023
Revenue increased by 5.9% from the
prior year with growth in the Support
and Research segments and a strong
performance in the Broking segment
in particular. The Financial segment
experienced a tougher year.
Performance in 2023
This increased by 8.2% from the
prior year driven by revenue growth,
increased investment return and
effective cost management across
the Group.
Performance in 2023
This increased by 9.9% in line
with the growth in underlying profit
before taxation
1
and a reduced
minority interest.
Performance in 2023
The FOB for the next 12 months
was comparable to the prior year
with strong freight rates across key
markets, an increased focus on period
business across all segments and
increased newbuilding business driven
by the green transition, leading to
more long-term fixtures executed.
Read more:
Note 3 of the consolidated financial
statements on pages 170 and 171.
Read more:
Financial review on pages 16 to 19.
Read more:
Note 8 of the consolidated financial
statements on page 176.
Read more:
Business review on pages 32 to 57.
Underlying profit before
taxation
1
£109.2m
Underlying earnings per share
1
275.0p
Forward order book (‘FOB’) at
31 December for following year
US$217m
21Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Our business model
Enabling global trade.
Leading positive change.
Our purpose
We empower our clients and our
people to make better informed
decisions using our market-leading
intelligence; and in doing so, meet
the demands of the world’s rapidly
evolving maritime, offshore, trade
and energy markets.
Our values
We always act with integrity
We are honest and straight talking
with no tolerance for hidden agendas
or politics. We act with thoughtfulness
and integrity so our clients know they
can trust us to do the right thing.
We’re dedicated to excellence
We work as a team, using our insight
and intelligence to explore innovative
solutions. We strive to exceed clients’
expectations, every time.
We collaborate and challenge
We’re committed to collective success
and we’re not afraid of challenging the
status quo to achieve it. Across over
60 offices in 24 countries, we work
together to reach the best outcomes.
Read more:
Purpose, values, behaviours and culture
on pages 110 to 111.
Our behaviours
Driven
…is the desire and passion to succeed,
deliver excellence and make positive
change: ‘the will to win.’
Resilient
…is the ability to persist and adapt
in difficult situations, bouncing back
from setbacks.
Collaborative
…is working with colleagues to
share information, develop skills,
build Clarksons’ community and
deliver results.
Relationship builder
…is building strong, sustainable
partnerships with colleagues, clients
and stakeholders.
Smart
…is solving problems, providing advice
and making smarter decisions based
on logic, facts, data and a future view.
Our competitive strengths
We have a leading reputation
We have built an end-to-end global
service over 170 years, and our
clients remain loyal to us due to
our unrivalled service, breadth of
knowledge and industry-leading
range of products that span the
maritime and financial markets.
We have the best people
in the business
Our people are our most important
asset, differentiating us from our
competitors. We focus on attracting,
retaining and developing the best
talent in the market, and our people
have a track record of delivering for
our global client base.
We take time to understand
our clients’ needs
We understand the challenges
our clients face in a rapidly evolving
world, drawing on the expertise from
across our four divisions to provide
them with tailored solutions and
services and the intelligence and
tools they need to make smarter
and cleaner decisions.
We provide clients with
authoritative intelligence
Research sits at the heart of
everything we do, enabling us
to provide bespoke solutions for
our clients and support them in
making fully informed business
decisions across their freight
and asset-owning strategies.
We provide clients with robust
technology platforms and tools
Our investment in technology
complements the expertise of
our people and provides our
clients with real-time intelligence
for decision-making and innovative
tools for trade.
We facilitate smarter, cleaner,
global trade
Through our Green Transition
offering, which encompasses the full
lifecycle of global maritime activity,
we are committed to helping our
stakeholders across the industry
with the critical decisions that they
will need to make to move towards
a cleaner future for global trade.
Scan to watch how
we live our values
22 Clarkson PLC
2023 Annual Report
T
E
C
H
N
O
L
O
G
Y
F
I
N
A
N
C
I
A
L
R
E
S
E
A
R
C
H
S
U
P
P
O
R
T
B
R
O
K
I
N
G
SMARTER
DECISIONS.
POWERED BY
INTELLIGENCE.
Broking
Our brokers act as intermediaries
between shipping principals in all
major markets in the world’s major
shipping centres. We bring together
charterers who have cargoes to move,
and owners of vessels capable of
transporting those cargoes. We help
the principals negotiate the terms
of a voyage, a timecharter hire or a
contract of affreightment, including
the freight or hire rate. We also help
clients contract newbuildings, buy and
sell secondhand vessels, and arrange
the scrapping of older tonnage.
Additionally, we provide derivative
broking services to enable principals
to manage and mitigate their risks.
We earn a broking commission based
on the value of the freight, the hire or
the asset. On our derivative broking
services we earn commission based
either on the underlying contract
value or as a fixed fee per contract.
Financial
The Financial division provides full
investment banking services, project
finance and bespoke asset finance
solutions to the shipping, offshore
and natural resources markets.
We help clients to manage risk,
fund transactions and conclude
deals which are not available through
more traditional routes. We liaise with
a range of potential investors in order
to raise funding for clients’ projects.
We earn commissions and fees from
these financial services activities.
Support
The Support division provides
the highest standards of support
with 24/7 attendance to vessel owners,
operators and charterers at a wide
range of strategically located ports.
We provide vessel agency, project
logistics, vessel chartering, freight
forwarding, warehousing, crew
travel and industrial supplies.
We earn fixed agency fees and
revenue from the sales of supplies.
Research
The Research division provides and
sells data, analysis and intelligence
covering every aspect of our markets,
including shipping, trade, offshore
and maritime. We provide clients
with access to the information they
need to operate their businesses
more effectively.
We earn revenue from digital
offerings, typically recurring, alongside
the provision of specialist services
including data feeds, consultancy,
valuations and market reports.
Read more:
Business review on pages 32 to 57.
Leading positive change
Enabling the green transition
Supporting our clients to reduce
their carbon footprint through sector
intelligence, technology and vessel
replacement strategies.
Enabling digital transformation
Investing in our internal tools to build
data-driven solutions for our clients,
and further developing our Sea
proposition to bring transformative
digital solutions to the freight
transaction process.
The value we create
Our clients
Offering a market-leading service at
every step of the shipping lifecycle.
Our people
Providing a great place to work where
everyone can fulfil their potential.
Our communities
Having a positive impact on
both the shipping community
and wider society.
Our shareholders
Generating sustainable long-term
value and returns.
SMARTER
DECISIONS,
POWERED BY
INTELLIGENCE
23Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Our markets
Market trends
Trade complexity
Global economic development,
leading to growth in volumes shipped,
amidst a dynamic geo-political
landscape, drives ever-increasing
complexities in trade. As an essential
part of the supply chain, our Broking
teams benefit from growing volumes
of cargoes and ships chartered, and
our expertise, global network and
market-leading research leave us well
placed to guide our clients through
this complex and ever-changing
environment.
Read more:
On page 25.
Green transition
Shipping must play its part in the
drive for a more sustainable future,
and societal and regulatory pressures
are accelerating the focus on the vital
fuelling transition that is needed to
meet targets to decarbonise the
industry and the IMO’s net zero
commitment. We have built a
dedicated Green Transition team of
experts who are advising our clients
on their freight, carbon and fleet
renewal strategies.
Read more:
On page 27.
Technology growth
Growing demand from clients
for digital services and solutions
that improve efficiency, regulatory
compliance, transparency and risk
management (particularly around
greenhouse gas emissions) is resulting
in increased demand for data,
intelligence and technology solutions.
We continue to invest in these areas
in line with our strategy, helping to
differentiate our offering from that
of our competitors and providing
market-leading solutions for
our clients.
Read more:
On page 29.
Energy transition
As the demand for sources of energy
which will moderate climate change
grows, changes in the fleet will be
required to accommodate the
transportation of alternative fuels
and to build and support offshore
renewable energy. The combined
expertise of all of our divisions
positions us well to support our
clients in their ship chartering, asset
and financing strategies as they
navigate the energy transition.
Read more:
On page 26.
Fleet evolution
As global trade continues to grow,
so too does the capacity of the
world’s shipping fleet. Dynamics
across the shipping fleet have
become increasingly complex.
As well as providing greater potential
volumes for our asset broking teams,
our Broking and Financial teams’
deep understanding of the markets,
supported by our comprehensive
and market-leading intelligence and
our growing technology business,
enable us to provide unrivalled
support to our clients.
Read more:
On page 28.
Understanding market dynamics
in a fast-changing world
24 Clarkson PLC
2023 Annual Report
Tonnes per capita
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
4
8
12
14
2
6
10
Bn tonnes
2.0
1.6
1.2
0.8
0.4
0.0
Jan 23
Feb 23
Mar 23
Apr 23
May 23
Jun 23
Jul 23
Aug 23
Sep 23
Oct 23
Nov 23
Dec 23
Feb 24
Jan 24
0
10
20
30
40
35
5
15
25
m. GT
Trade complexity
Context
Global economic development drives growth in trade while
a shifting geo-political landscape is creating disruption
events and increasing complexity. Today the shipping
industry moves 12.3bn tonnes of trade, with volumes
increasing by 80% in the past 20 years and 20% in the
past 10 as population growth, emerging markets and trends
in expanding commodities such as gas impact. Change
is constant, from economic cycles and, increasingly,
from disruption events that the shipping industry must
manage while continuing its vital role in moving 85% of
all international trade. Geopolitics increasingly disrupts
and changes trade flows while also creating an extensive
international sanctions and compliance regime. The
redistribution of oil and gas flows after the Russia-Ukraine
conflict has increased trade distances and driven tanker
rates to high levels. LNG has largely replaced European
pipeline trade. Trade tensions between the US and
China remain and Middle East conflict is disrupting vital
shipping choke points and threatening supply chains.
Against this dynamic backdrop shipping companies,
traders and cargo interests look increasingly to service
providers that can guide, partner and support them
through these ever-increasing complexities.
What this means for Clarksons
Enabling global trade is central to our strategy. As an
essential part of the freight supply chain and market leaders
across all major cargo sectors, our Broking teams benefit
from growing volumes of cargo traded and ships chartered
and in the support needs of our clients in managing
disruption. We are diversified, achieving market-leading
positions and specialised expertise in every shipping
segment, increasingly vital as volumes and complexity
build. Our strategy to build a truly global network of
offices, expanded again in recent years, allows us to
combine global reach with local relationships, knowledge
and expertise. Our deep understanding, through our
research and analysis of increasingly complex trade flows
and geo-political disruption, makes us a trusted advisor
and intelligence provider to cargo interests and shipowners
as they execute strategies to manage increasing disruption.
Our investments and scale are increasingly needed by
clients as they look to improve productivity and manage
risk, leveraging off our investments in legal and compliance
support, in our technology and in our data-led solutions.
This truly differentiates our service offering in an
increasingly complex world.
Global trade carried on ships
85%
Estimated total increase in global seaborne trade
average haul across 2020-24
+4%
Reduction in Suez Canal transits in January 2024,
versus first half of December 2023
-54%
Seaborne trade 2000-2023
Weekly Suez Canal and Panama Canal transits
Global Seaborne trade (LHS) Trade per capita (RHS)
Source: Clarksons Research
Suez Panama
Source: Clarksons Research
25Clarkson PLC
2023 Annual Report
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Financial
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Other
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0
2,000
4,000
6,000
7,000
1,000
3,000
5,000
m. GT
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
Energy transition
Context
As pressures build globally to moderate climate change,
the energy transition will impact demand for shipping.
Offshore renewables will provide green energy, expanding
significantly from a current 0.4% of global energy supply.
A dedicated fleet is needed for this expansion, supporting
the development and maintenance of offshore wind farms
as this sector becomes more international and moves
further from shore. Alternative fuels such as ammonia
and methanol will require transportation, with newbuilding
investment needed, while transportation needs for CO
2
will
expand, requiring a new generation of tankers. But at the
same time this transition must be managed while ensuring
energy security, where the shipping industry will play an
equally vital role. Nearly 40% of all seaborne trade today
involves energy transportation, crucial in ensuring this
security in the decades to come. Alongside more mature
trends in coal, shipping requirements for cleaner energy
such as gas are expanding. Offshore oil and gas continue
to provide 16% of global energy supply, requiring important
investment for the foreseeable future.
What this means for Clarksons
Our strategy commits to supporting the vital energy
transition and energy security. We are growing our
participation in the renewables sector, allowing us to help
lead positive change. The dedicated renewables broking
and advisory team at Clarksons has become a market
leader, focusing on the offshore wind industry and working
closely with clients in this expanding sector and executing
a significantly increased level of newbuilding and chartering
business. Within our Broking division, we have also built out
specific teams that are now supporting the development
of carbon capture and transportation and we are well
positioned as market leaders in the growing gas
transportation markets of LNG and LPG. Our Support and
Financial divisions, leveraging our expertise in offshore oil
and gas, have also built dedicated renewables teams that
are growing organically and through acquisitions as they
become increasingly active. Our Financial team is active
across the renewables market to include specialist battery
minerals, carbon and hydrogen. Furthermore, our Research
team has developed world-leading research and intelligence
on the global offshore wind industry, delivered through
their Renewables Intelligence Network platform, while
running analysis that allows understanding of the energy
transition in a maritime context. As long-term market
leaders in shipping services support to the oil tanker
and offshore oil and gas vessel sectors, we are committed
to supporting energy producers and traders in their ship
chartering, asset and financing strategies as they manage
both energy transition and energy security.
Estimated increase in global offshore wind power
generation in the last 10 years
11x
Our markets continued
Seaborne energy trade (2023e): 4.7bn tonnes
Offshore renewables generation 2000-2050(f)
Steam coal 1,046mt
Crude oil 2,032mt
Oil products 1,083mt
LPG 128mt
LNG 411mt
Source: Clarksons Research
Rapid Decarbonisation Gradual Transition
Source: Clarksons Research
26 Clarkson PLC
2023 Annual Report
Green transition
Context
The need to transition to a green and sustainable economy
is an urgent priority for society and the shipping industry
must play its role in reducing greenhouse gas emissions
whilst managing the complex but essential flow of global
trade. Shipping produces around 2% of global CO
2
emissions
and, whilst shipping remains the most carbon-efficient
means of transport, further acceleration of decarbonisation
strategies is crucial. Regulation is driving change.
IMO short-term measures introduced in 2023 are already
starting to influence investment and operational behaviour.
And from 2024, shipping is included in the EU ETS carbon
trading system, putting a price on carbon in the shipping
industry for the first time. These new and complex
environmental regulations and policies are a significant
step on shipping’s decarbonisation pathway. With a net
zero commitment for the first time from the IMO, regulation
will accelerate. Significantly increased investments in fleet
renewal, technology and port infrastructure will be needed
to facilitate the fuelling transition that will be vital to
decarbonisation. However, there are hugely challenging
strategic decisions for shipowners and cargo interests
given uncertainties around propulsion technology,
regulation and timing of investment decisions. Regulations
and policies are also increasingly impacting supply
and demand dynamics and commercial decisions across
the shipping markets, including the speed of vessels.
The impacts of the green transition across the maritime
industry will be deep and long-standing, requiring huge
investment, technology change and innovation.
What this means for Clarksons
The green transition is central to our strategy as we look
to lead positive change. We strive to manage our own
operations sustainably and, by evolving and investing
in our market-leading service offering, we can facilitate
positive industry change by supporting our clients to
develop, validate, execute, finance and monitor their
policies and strategies to decarbonise. We invest to provide
market-leading support to cargo interests and shipowners
in executing their freight, carbon and fleet renewal
decisions that combine commercial opportunities with
the meeting of environmental targets. Clarksons is uniquely
placed to advise, execute and finance fleet renewal
strategies, building on our unrivalled track record with
alternative-fuelled newbuilding projects by continuing to
invest in our expertise and offering. We have established
a dedicated advisory team to work with our Broking teams
to develop and execute decarbonisation strategies for our
clients and are uniquely placed to understand and explain
the economic impact of new regulations and policies.
We have initiated advisory and broking services for the
growing carbon credits market. Our Financial teams are
already active in green financing initiatives and increasingly
across the specialist battery, mineral and renewables
industries. Our technology team has developed innovative
emissions reporting and monitoring tools. The wide-ranging
data and intelligence developed by our Research team,
including coverage of green technology on board ships,
alternative fuels, CO
2
emissions benchmarking, vessel
speeds and bunkering facilities, is widely used by the
shipping industry, academic research and policymakers
as a trusted source.
Shipping’s share of global CO
2
emissions (2023e)
2.2%
Estimated amount of CO
2
produced by the world
shipping fleet in 2023 (tank-to-wake)
833m tonnes
Share of tonnage ordered in 2023 capable of using
alternative fuels
45%
Shipping’s share of global CO
2
emissions (2023e)
Shipping 2.2%
Other 97.8%
Source: Clarksons Research
27Clarkson PLC
2023 Annual Report
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Other
information
% year-on-year growth
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
0.4
0.8
1.2
1.8
1.6
0.2
0.6
1.0
1.4
Bn GT, end year
10
8
6
4
2
0
Fleet evolution
Context
Over the past 20 years, the capacity of the world’s shipping
fleet has grown by more than 150% to over 1.6 billion GT as
the shipping industry has expanded to meet its crucial role
in servicing global trade. Although fleet growth has started
to moderate in recent years and some supply constraints
have developed helping markets recalibrate, the world fleet
is significantly larger (+90% by tonnage) and broader by
type than at the start of the global financial crisis, providing
greater potential volumes for our asset broking teams.
The dynamics across the shipping fleet are also becoming
increasingly complex, with trends towards slower speeds,
increasing length of haul, storage plays, ‘tiering’ of charter
markets, shipyard consolidation and congestion. The
finance landscape for the shipping industry has also
changed significantly since the financial crisis, impacting
the number and geography of institutions participating
and the scale of finance available. This has led to many
shipowners and cargo interests diversifying their funding
sources and investigating new and more complex financing
solutions and structures. Green issues specifically, and ESG
more broadly, are increasingly impacting the policies of
ship finance institutions and access to finance for cargo
and vessel owners. Despite these trends and complexities,
financing the world shipping fleet and its renewal to meet
decarbonisation targets remains hugely capital intensive,
with today’s shipping and offshore fleet valued at US$1.7tn
and the world orderbook limited by historical standards.
What this means for Clarksons
Our strategy, to develop Broking teams that are market
leaders through the full lifecycle of the asset and across
every ship type operating in the world fleet, benefits from
the increased fleet capacity, the broader nature of the
shipping fleet and greater volumes of vessels bought and
sold in recent years. The guidance and execution that our
market-leading Financial teams can provide across the
more complex ship finance landscape, at a time of
increasing investment needs around the green transition,
is unique in the market. Our deep expertise, combined with
an innovative approach, allows us to support our clients to
raise finance across capital markets, project finance, debt
markets and through leasing structures. Our understanding
of the world’s shipping fleet and shipbuilding industry, both
at an aggregate trend level and on an individual asset basis,
is unrivalled. This understanding builds on the synergies
between our Broking, Financial and Research teams and
supports our clients in their decision-making across our
complex and multi-cyclical markets. Our Research coverage
has been built out to cover all markets and offer unique
understanding of the expanded global fleet and shipbuilding
capacity position. Our valuations, leveraging our
understanding of the more complex dynamics driving the
world fleet, continue to be trusted as the market-leading
source across the finance sector.
Value of the world fleet and orderbook at start-2024
US$1.7tn
Global orderbook as a percentage of fleet capacity
11%
Our markets continued
Value of the world fleet and orderbook at start-2024
World fleet growth 2000-2023
Tankers US$332bn
Bulkers US$317bn
Boxships US$243bn
Gas US$236bn
Other Vessels US$349bn
Offshore US$264bn
Source: Clarksons Research
Bn GT, year end (LHS) % year-on-year growth (RHS)
Source: Clarksons Research
28 Clarkson PLC
2023 Annual Report
1993
1998
2003
2008
2013
2018
2023
0
20
60
50
80
70
40
30
10
%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024f
2025f
0
60
40
100
140
200
180
20
80
120
160
Zettabytes
Technology growth
Context
Rapidly evolving technology is introducing opportunities
to radically improve efficiency, regulatory compliance
and transparency. These trends are amplifying within the
shipping industry, as they are across society, with growing
demand for digital services and solutions that leverage
these opportunities around the freight transaction process
and the monitoring and management of risk and emissions.
But with the opportunities from new technology, such as
AI, there are also risks. The need to provide trusted data
and intelligence is more vital than ever. And while a range
of new technology entrants are also looking to exploit
these opportunities, industry participants are increasingly
looking to work with established partners with critical
mass, domain knowledge and industry understanding.
What this means for Clarksons
Technology is central to our strategy. Shipping must use
innovative technology to digitalise its workflows but needs
trusted partners that understand, not just technology, but
also our industry. We invest in technology and data across
all of our business lines, including developing tools for trade
for our core Broking business that help differentiate our
teams from competitors and demonstrate the power of
our offering and market knowledge to clients. Our Broking
business is now executing a dedicated Digital Transformation
strategy. Our broader investments into the digitalisation of
our workflows and the evolution of digital support systems
are long-standing and provide a competitive edge for our
Broking, Financial and Support divisions. Our Research
division continues to utilise innovative technology to
generate and deliver its proprietary data and intelligence,
with growing demand across the industry to integrate data
into client internal digital systems. Our technology arm
has invested in a market-leading integrated platform
connecting charterers, brokers and owners to support
streamlined pre-fixture workflows. This investment has
been significant, long-term and in recent years has involved
a number of strategic acquisitions. The platform enables
greater collaboration and stronger governance across the
chartering ecosystem, while also allowing users to optimise
their freight and emissions.
Total global data created annually
Share of global population connected to the internet
~70%
Increase in total annual data created globally
over the last three years
+88%
Global growth in internet access
% of global population using the internet
Source: UN, industry sources, Clarksons Research
Zettabytes of data
Source: Industry sources, Statista
29Clarkson PLC
2023 Annual Report
Overview
Corporate
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Financial
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Report
Other
information
Our strategy
Breadth Reach Understanding People Trust Growth
Expanding our
breadth to better tailor
our integrated offer
With an expanding and
industry-leading range
of products and services
spanning the maritime,
offshore, trade and energy
markets, and more touch
points across the industry
than anyone else, we are
uniquely positioned to
empower our clients to
make better informed
decisions, whilst enabling
smarter, cleaner global trade.
Achievements
– Significant investment
in new resources in the
US in order to attract
more investment in the
development of offshore
wind vessels in the US
market and support the
expansion of the offshore
wind market.
– Acquisition by the Sea
business of both MarDocs
and Recap Manager
software which enables
companies to create,
share and manage their
charterparties.
– Further development
and expansion of the
Green Transition team.
– Formation of a strategic
partnership between
Spot Ship and the Sea
business to automate the
vessel and cargo matching
process, enhancing
the data available to
clients and powering
data-driven decisions.
Read more:
Our strategic performance
in 2023 on page 42.
Extending our
reach to support
clients globally
Our global presence enables
us to meet client needs
wherever and whenever
they arise. Through our
growing global office
network we share culture,
values, IT systems and high
standards of corporate
governance across our
business, as we use our
local knowledge to provide
our clients with truly global,
cross-border advice.
Achievements
– Acquisition by the Port
Services business of
DHSS, a leading provider
of integrated logistics
services to the offshore
renewable industry.
Based in the Netherlands,
the acquisition expands
our reach into
mainland Europe.
– Opening of an office
in Edinburgh to support
the offshore renewables
market in Scotland.
– Extension of the dry cargo
business’s global coverage
by acquiring a new team
in Rio de Janeiro to
expand into the South
American market.
– New Gibb Group facility
opened in Rhode Island
(trading from 2024)
to respond to customer
demand and the growth
of offshore energy.
– Expansion of the
Research team’s presence
in New Delhi to cement
its Asian and emerging
market position.
Read more:
Our strategic performance
in 2023 on pages 49.
Stronger
understanding
of clients’ needs
With a broad and
long-established client
base, we have worked
with many of our clients
for generations, building
a deep understanding
of their businesses and
providing the services
that have helped them to
prosper. We use our leading
technology and authoritative
intelligence to offer unique
and tailored solutions to
meet our clients’ needs.
Achievements
– Reformation and relaunch
of a projects desk within
Specialised Products to
perform a more integrated
role across newbuilding,
sale and purchase and
time charter.
– Establishment of
the Custom Software
Development business
unit within our Sea
business, which creates
bespoke software
solutions for our clients.
– Further development and
expansion of the Green
Transition team.
Read more:
Our strategic performance
in 2023 on page 45.
Empowering
people to fulfil
their potential
We are committed to
attracting and retaining
the best people, providing
them with the tools and
training that empower
them to fulfil their potential.
Our employees have access
to our leading technology
and authoritative
intelligence, enabling them
to support our clients to
make smarter and better
informed decisions.
Achievements
– Further embedded
our competency and
behaviours framework
to support leadership and
employee development,
performance management
and promotions based
on consistent criteria.
– Launch of the 2023 Trainee
Broker Programme,
designed to provide
trainees with experience
across various broking
teams to accelerate their
career development and
develop the next
generation of brokers.
– Campaign to inspire the
next generation of women
to join the maritime
industry through
promoting stories from
women across Clarksons.
– Launch of the Clarksons
Academy, our centralised
global learning portal
which provides access to
a wide range of learning
and development
opportunities for
all employees.
– Establishment of
the Clarksons’ Buddy
Programme, a 12-month
mentoring programme
for junior employees.
Read more:
Our strategic performance
in 2023 on page 33.
Maintaining
trust in shipping
intelligence
Globally respected as a
provider of market-leading
data and intelligence, our
research and data is widely
trusted across the shipping
industry to inform effective
decision-making.
Achievements
– Regular tracking and
briefings around Red Sea
disruption, supporting vital
understanding of impacts
on shipping markets.
– Continued provision
of market-leading data
on alternative fuelling,
Energy Saving
Technologies, vessel
speeds and CII ratings.
– Market impact
assessments around
fuelling transition, IMO
short-term measures
and the EU ETS.
– Further enhancements of
Renewables Intelligence
Network, providing
leading data on offshore
renewables, including the
fast-growing offshore
wind sector.
Read more:
Our strategic performance
in 2023 on page 52.
Growing our
business to improve
performance
We are a consistently
profitable and
cash-generative business
that is focused on creating
long-term value for our
shareholders. We continue
to invest to build on our
position as the market leader
across our core sectors
through the provision of
best-in-class advice and
service to our clients.
Achievements
– Maintained our
progressive dividend
policy and increased
our dividend for the
21st consecutive year.
– Attained an 8.2%
increase in underlying
profit before tax
1
.
– Remained cash-generative
and increased our free
cash resources
1
.
– Continued to invest in
new people and teams,
training and developing
our existing talent,
expanding our product
footprint and developing
market-leading tools
and intelligence.
Read more:
Financial review
on pages 16 to 19.
Our strategy is to
create long-term
sustainable value for
all of our stakeholders
We do this by building
on our strong
performance, which
allows us to maintain
and develop our
position as the global
market leader in
shipping services.
30 Clarkson PLC
2023 Annual Report
Breadth Reach Understanding People Trust Growth
Expanding our
breadth to better tailor
our integrated offer
With an expanding and
industry-leading range
of products and services
spanning the maritime,
offshore, trade and energy
markets, and more touch
points across the industry
than anyone else, we are
uniquely positioned to
empower our clients to
make better informed
decisions, whilst enabling
smarter, cleaner global trade.
Achievements
– Significant investment
in new resources in the
US in order to attract
more investment in the
development of offshore
wind vessels in the US
market and support the
expansion of the offshore
wind market.
– Acquisition by the Sea
business of both MarDocs
and Recap Manager
software which enables
companies to create,
share and manage their
charterparties.
– Further development
and expansion of the
Green Transition team.
– Formation of a strategic
partnership between
Spot Ship and the Sea
business to automate the
vessel and cargo matching
process, enhancing
the data available to
clients and powering
data-driven decisions.
Read more:
Our strategic performance
in 2023 on page 42.
Extending our
reach to support
clients globally
Our global presence enables
us to meet client needs
wherever and whenever
they arise. Through our
growing global office
network we share culture,
values, IT systems and high
standards of corporate
governance across our
business, as we use our
local knowledge to provide
our clients with truly global,
cross-border advice.
Achievements
– Acquisition by the Port
Services business of
DHSS, a leading provider
of integrated logistics
services to the offshore
renewable industry.
Based in the Netherlands,
the acquisition expands
our reach into
mainland Europe.
– Opening of an office
in Edinburgh to support
the offshore renewables
market in Scotland.
– Extension of the dry cargo
business’s global coverage
by acquiring a new team
in Rio de Janeiro to
expand into the South
American market.
– New Gibb Group facility
opened in Rhode Island
(trading from 2024)
to respond to customer
demand and the growth
of offshore energy.
– Expansion of the
Research team’s presence
in New Delhi to cement
its Asian and emerging
market position.
Read more:
Our strategic performance
in 2023 on pages 49.
Stronger
understanding
of clients’ needs
With a broad and
long-established client
base, we have worked
with many of our clients
for generations, building
a deep understanding
of their businesses and
providing the services
that have helped them to
prosper. We use our leading
technology and authoritative
intelligence to offer unique
and tailored solutions to
meet our clients’ needs.
Achievements
– Reformation and relaunch
of a projects desk within
Specialised Products to
perform a more integrated
role across newbuilding,
sale and purchase and
time charter.
– Establishment of
the Custom Software
Development business
unit within our Sea
business, which creates
bespoke software
solutions for our clients.
– Further development and
expansion of the Green
Transition team.
Read more:
Our strategic performance
in 2023 on page 45.
Empowering
people to fulfil
their potential
We are committed to
attracting and retaining
the best people, providing
them with the tools and
training that empower
them to fulfil their potential.
Our employees have access
to our leading technology
and authoritative
intelligence, enabling them
to support our clients to
make smarter and better
informed decisions.
Achievements
– Further embedded
our competency and
behaviours framework
to support leadership and
employee development,
performance management
and promotions based
on consistent criteria.
– Launch of the 2023 Trainee
Broker Programme,
designed to provide
trainees with experience
across various broking
teams to accelerate their
career development and
develop the next
generation of brokers.
– Campaign to inspire the
next generation of women
to join the maritime
industry through
promoting stories from
women across Clarksons.
– Launch of the Clarksons
Academy, our centralised
global learning portal
which provides access to
a wide range of learning
and development
opportunities for
all employees.
– Establishment of
the Clarksons’ Buddy
Programme, a 12-month
mentoring programme
for junior employees.
Read more:
Our strategic performance
in 2023 on page 33.
Maintaining
trust in shipping
intelligence
Globally respected as a
provider of market-leading
data and intelligence, our
research and data is widely
trusted across the shipping
industry to inform effective
decision-making.
Achievements
– Regular tracking and
briefings around Red Sea
disruption, supporting vital
understanding of impacts
on shipping markets.
– Continued provision
of market-leading data
on alternative fuelling,
Energy Saving
Technologies, vessel
speeds and CII ratings.
– Market impact
assessments around
fuelling transition, IMO
short-term measures
and the EU ETS.
– Further enhancements of
Renewables Intelligence
Network, providing
leading data on offshore
renewables, including the
fast-growing offshore
wind sector.
Read more:
Our strategic performance
in 2023 on page 52.
Growing our
business to improve
performance
We are a consistently
profitable and
cash-generative business
that is focused on creating
long-term value for our
shareholders. We continue
to invest to build on our
position as the market leader
across our core sectors
through the provision of
best-in-class advice and
service to our clients.
Achievements
– Maintained our
progressive dividend
policy and increased
our dividend for the
21st consecutive year.
– Attained an 8.2%
increase in underlying
profit before tax
1
.
– Remained cash-generative
and increased our free
cash resources
1
.
– Continued to invest in
new people and teams,
training and developing
our existing talent,
expanding our product
footprint and developing
market-leading tools
and intelligence.
Read more:
Financial review
on pages 16 to 19.
1 Classed as an APM.
See pages 219 and 220 for
further information on APMs.
31Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Business review
Broking
Our investment in all areas
of shipbroking ensures that
we can support our clients
across both mainstream
and more niche markets,
in every vertical.
Dry cargo
Supporting a range of important
industrial sectors including construction,
energy and agriculture, the dry cargo
sector moved over 5.5bn tonnes of
cargo in 2023 across a range of dry
bulk commodities, including metals
and minerals, agricultural products
and some semi-processed goods.
The dry bulk market in 2023 was
characterised by very firm cargo
volumes despite the macro-economic
backdrop, a series of weak economic
data points and headlines in key
economies, and higher interest rates.
However, continued fleet growth plus
an unwinding in congestion meant
that dry cargo markets were relatively
subdued for much of 2023, with
weighted bulkcarrier earnings averaging
US$12,371/day, down 40% year on year
and close to the long-term trend.
Market conditions took a sharp
upward turn in the final quarter of the
year, as a surge in Capesize cargoes
from the Atlantic combined with a rise
in congestion at Chinese discharge
ports to create an upturn in Capesize
earnings, peaking at approximately
US$50,000 per day, their highest level
since October 2021. At the same time,
a firm grain export programme from
Brazil plus sustained strength in Asian
coal markets boosted demand for
mid-size tonnage against a backdrop
of growing restrictions around
Panama Canal transits. Further trade
flow disruption emerged at the end of
the year with many owners choosing
to avoid the Suez Canal due to attacks
on ships in the Red Sea. This has led
to increasingly significant re-routing
of ships, longer voyages, vessel
positioning disruption and some
upside pressure on freight rates.
Looking forward to 2024, another
year of moderate fleet expansion is
projected, particularly in the mid-size
sectors, while demand is generally
expected to remain firm, even if
growth may moderate from last year’s
strong rates. Emerging markets look
likely to drive the majority of trade
growth, while the outlook for Chinese
seaborne demand (particularly around
coal) is uncertain after record volumes
in 2023.
£516.8m
2022: £495.5m
1,365
2022: 1,301
£121.2m
2022: £117.6m
Share of revenue Segmental split of underlying
profit before taxation
Employees
Forward order book for 2024
US$217m*
As at 31 December 2022
for 2023: US$216m*
* Directors’ best estimate of deliverable
forward order book (‘FOB’)
Services:
– Dry cargo
– Containers
– Tankers
– Specialised products
– Gas
– LNG
– Sale and purchase
– Offshore
– Renewables
– Futures
32 Clarkson PLC
2023 Annual Report
Strategy in action:
What we achieved in 2023
We are continuing to build the
diversity of our talent pipeline
through skills and experience
development programmes,
such as paid internships and
the Trainee Broker Programme.
We have reached an increasingly
broad pool of candidates through
careers events, partnerships
and campaigns.
Read more:
Our people on pages 84 to 89.
drives growthInvesting in people
33Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Business review continued
Headline supply-demand fundamentals
in the bulker sector seem fairly
balanced, while there is some potential
for gains to materialise through the
year, especially given typical seasonal
trends. Port congestion and disruption
from the re-routing of trade flows
towards longer distance routes may
also impact vessel demand, while
the accelerating environmental and
regulatory agenda (including the
EU ETS), alongside volatility and risks
to markets from geo-political and
weather events, could add additional
complexity to markets in 2024. These
weather events include the developing
El Niño event and its influence on
commodity supply.
Our dry cargo shipbroking team are
market leaders and achieved strong
increases in volumes across all desks in
2023, including significant increases in
transactions and fixtures. We increased
headcount, including an expansion
into South America that created the
dry cargo team’s first footprint in the
region. Following previous investments,
we have also significantly increased our
forward orderbook through increased
period fixture activity. Our investments
in the green transition supported a
successful tender to become exclusive
brokers for a green steel project in
Northern Europe.
Containers
The container sector facilitates
transportation of a wide range of
goods, often high-value, including
consumer and industrial goods,
foodstuffs, chemicals and other
manufactures. Container shipping
markets saw a downward trend
across most of 2023, after a sharp
normalisation in the second half of
2022 from the previously exceptional
levels, amid lower levels of port
congestion, an accelerated expansion
in fleet capacity and weak container
trade trends. As a result, container
freight rates and containership
timecharter earnings faced negative
pressure and declined through large
parts of the year with the SCFI spot
box freight index falling to a three-year
low by the end of September, close to
the pre-COVID-19 trend. The Clarksons
charter rate index remained marginally
above the pre-COVID-19 trend but
also slipped to a three-year low.
However, late 2023 saw major
disruption to liner services due to the
rapidly evolving events in the Red Sea
region. This tightened the container
freight market notably, including a
sharp spike in Far East-Europe spot
box freight rates.
Containers
83%
Of newbuild capacity ordered
was alternate fuel capable
Tankers
81%
Year-on-year increase
in VLCC earnings in 2023
34 Clarkson PLC
2023 Annual Report
Supply expansion was the key driver
of container market pressure in 2023,
with capacity growth of 8% and
record deliveries (2.3m TEU), although
some excess supply was absorbed
by slower speeds (decreased by 3%
to a record low). Newbuild ordering
remained active in 2023 overall, with
1.6m TEU contracted, led by liner fleet
renewal efforts, while 83% of capacity
ordered was alternative fuel capable
(mostly methanol, but also LNG).
Seaborne container trade remained
weak in 2023 with growth estimated
at just 0.4% in TEU (1.4% in TEU-miles)
amid macro-economic headwinds
on key trades, though more robust
volume trends were seen in exports
from Asia to developing economies,
and volumes globally began to
stabilise in the second half.
Looking ahead, the positive freight
market impetus from the Red Sea
disruption at the outset of the year
adds significant uncertainty. The base
case outlook for container shipping
markets through 2024 suggests, once
disruption eases, further softening
across freight and charter markets.
A second consecutive year of
accelerated supply expansion
(7.3% projected with record deliveries
of 2.6m TEU) looks set to impact,
even if global seaborne container trade
has the potential to improve in 2024
(TEU growth of more than 3% forecast)
as economic headwinds moderate.
However, the duration of disruption in
the Red Sea remains highly uncertain
and the scenario of a prolonged
period of re-routing containerships
around the Cape of Good Hope would
have significant demand implications,
providing the possibility of significant
upside to the market outlook.
In 2023, our containership broking
teams were able to assist in several
long-term charters of new generation
vessels, helping to secure liner
companies’ access to cheaper and
more fuel-efficient tonnage going
forward. Working with our Green
Transition advisory team, we also
assisted many containership investors
globally evaluate the various cleaner
fuel types that will be available in the
coming years and this is expected to
remain a major theme going forward.
Tankers
The tanker sector plays a crucial
role in global energy supply chains,
moving crude oil and refined oil
products to facilitate their eventual
use as transportation fuels, for heating
and electricity generation, and as
industrial feedstocks.
Overall, 2023 was another very strong
year for tanker markets. There was
some divergence in the trajectory
of earnings across the various size
ranges, with large crude tankers
performing particularly well relative
to 2022 and Aframax and product
tankers easing slightly but remaining
at historically strong levels. The VLCC
market benefited from a rebound in
Chinese crude imports from low levels
across 2021-22 due to COVID-19-related
disruption. OPEC+ production cuts
implemented from November 2022,
and successive additional voluntary
cuts, proved to be headwinds to the
market. However, rising production
and exports from Atlantic Basin
producers lent support. The net effect
of these developments, and limited
newbuilding deliveries, was that
average VLCC earnings* increased
by 81% year on year in 2023, bringing
earnings back above long-run average
levels. The Suezmax and Aframax
sectors continued to be heavily
influenced by the impact of the
Russia-Ukraine conflict and the
resultant rearrangement of crude
oil trading patterns, including longer
transport distances for European
crude oil imports and Russian crude
oil exports. An increase in volumes
loaded from the Atlantic also aided
this sector, with average Suezmax
earnings rising 21% year on year,
while average Aframax earnings
were broadly steady. Products tanker
earnings generally softened marginally
from very strong 2022 levels, though
remained historically firm.
* All earnings basis non-eco, non-scrubber
fitted units.
35Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Earnings for LR2s on the Middle
East-Far East route fell 7% year on
year in 2023, while earnings for LR1s
on the same route declined by 16%
year on year and average earnings
for clean trading MRs fell by a similar
extent. Earnings in all three sectors
remained well above long-run
averages. Products tanker markets
were also supported by increases in
clean products shipments from the
Middle East, as well as disruption
at the Panama Canal.
Looking ahead, the tanker sector
is expected to see a continuation of
strong but volatile market conditions.
The supply side remains very
supportive with newbuilding deliveries
set to fall to extremely low levels
in 2024, while fleet carrying capacity
is also expected to be constrained
by environmental regulations.
On the demand side, additional OPEC+
production cuts announced at the
end of November 2023 are expected
to be a short-term headwind. However,
projections for rising oil demand and
growth in long-haul Atlantic–Asia
crude oil trade point to further growth
in vessel demand. In the products
tanker markets, further increases in
refinery throughput in the Middle East
look set to provide market support.
Ongoing geo-political uncertainties
point to the potential for further
volatility in the markets. Geo-political
and weather developments have
brought uncertainty to two key transit
areas, namely the Bab al-Mandeb Strait
in the Red Sea and the Panama Canal,
which have the potential to create a
substantial increase in vessel demand
should disruption persist or worsen.
Supported by our scale, regional
breadth, expert analysis and technology
tools, our tanker shipbroking team
performed exceptionally in 2023 as we
supported our clients through disrupted
and volatile markets. In the current
volatile geo-political environment, our
teams reacted proactively to changes
in key market dynamics, supported in
particular by our expert analyst team.
All of our core hub offices benefited
from the power of our global teams
working together, driving information
flows and commercial advantage across
our key markets, and our successful
strategy to grow our time charter team
has resulted in increased period fixture
business and forward orderbook.
Growth of teams in key emerging
markets, including India, Dubai, Brazil
and China, is planned for 2024.
Specialised products
The chemical tanker fleet within the
specialised products market transports
a wide range of liquid chemical
cargoes, supporting the supply chains
of a diverse range of sectors across
global industry, including manufacturing
and agriculture.
The specialised products tanker
market remained healthy in 2023,
with a number of factors including the
ongoing Russia-Ukraine conflict and
the associated re-routing of chemical,
biofuel and CPP trade flows, as well as
the separate Panama and Suez Canal
disruptions, supporting the markets
despite some economic and demand
headwinds. Bulk chemical freight rates
fell by 14% in 2023, albeit from firm
levels in 2022. Freight increased
by 9% in the second half of the year
and freight rates ended the year 30%
higher than levels reported in 2008.
Elsewhere, competition for CoA
volumes rose with owners looking for
longer-term coverage to ensure cargo
cover, rather than purely relying on
the spot market.
Looking at 2024 and beyond, the
ongoing disruption in the Middle East
and Panama Canal will continue to
have an impact on fleet productivity
and trading distances, at least in the
short term. Demand headwinds look
set to be in place for the next few
months, so overall fixture numbers
are likely to remain stable, at least in
the first half of the year. The prevailing
medium- to long-term picture is
however more optimistic, with supply
side constraints from low, or even
negative, fleet growth expected
to impact.
Business review continued
36 Clarkson PLC
2023 Annual Report
With the ongoing geo-political and
macro-economic upheaval taking
place around the world, our specialised
products shipbroking team once again
proved its resilience throughout 2023
with a strong trading performance.
Our unmatched knowledge, expertise
and global breadth of coverage in this
sector ensured our customer portfolio
was maintained and their requirements
exceeded. Our market-leading analysis
allowed us to deepen relationships
with the senior management teams
of owners, pools and charterers and
we also spent time, supported by
the carbon broking desk at Clarksons,
advising our client base on the impact
of the EU ETS. We stand at the
forefront of the specialised products
markets, mitigating client freight risk
by utilising our global network of
offices and local knowledge to provide
an unmatched breadth of service
provision in what is a challenging
and complex marketplace.
Gas
The gas shipping markets move
liquefied petroleum and other gases,
supporting a wide range of sectors,
from plastics and rubber production
to industrial and domestic energy
markets. Around 130mt of LPG was
moved in 2023, as well as smaller
quantities of ammonia, ethane and
petrochemical gases.
2023 was a record-breaking year for
VLGC earnings, as increased vessel
demand and market inefficiencies
outweighed the delivery of 42
newbuild units into the trading fleet.
The benchmark Ras Tanura-Chiba
spot rate reached a record US$183/mt
in late September 2023 ($5.3m per
month on a TCE basis) and averaged a
record US$109/mt across the full year.
Market strength in 2023 came on the
back of firm growth in US LPG exports
(+13% year on year), which surprised
to the upside, while severe disruption
at the Panama Canal also played a key
role, particularly in the fourth quarter
as transit limits came into force amid
low water levels. The resulting switch
in most US-Asia trade to much
lengthier alternative routings drove
a major uplift in tonne-mile demand,
which has recently been further
complicated by ongoing security
issues in the Red Sea.
Specialised products
-14%
Fall in bulk chemical freight rates
in 2023
Gas
130mt
Of LPG moved by sea during 2023
37Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Exceptional spot market strength
in the largest segment trickled down
to smaller vessel sizes, with one-year
TC rates for MGCs ending the year at
US$1.25m per month, also an all-time
high. In the petchems sector, a pivotal
shift in the market dynamics saw the
balance of power transitioning from
charterers to owners. Rates grew
consistently in the smaller semi-ref
and pressure segments that are active
in petrochemical gases, and asset
utilisation is reaching high levels across
the fleet. Sentiment remains generally
positive in the smaller ship segments
against a limited orderbook as we enter
2024, albeit against a backdrop of a
tricky European petrochemical climate.
The buoyant chartering environment
supported both newbuild and
secondhand sale and purchase
(‘S&P’)activity, with asset prices rising
firmly. In terms of longer-term trends,
newbuild activity was focused on Very
Large Ammonia Carriers (‘VLACs’),
with 21 units ordered. From being
a non-existent segment previously,
VLACs accounted for the bulk of the
40 newbuild VLGC orders placed in
2023. Decarbonisation was also an
evident theme in the smaller sizes,
with the first ever ammonia-fuelled
vessels ordered, as well as the first
ever speculative newbuild liquefied
CO
2
(‘LCO
2
’) carriers. Already involved
in these orders, Clarksons further
deepened its visible commitment
to the emergent LCO
2
segment
by joining the UK’s Carbon Capture
and Storage Association (‘CCSA’),
becoming the first shipbroker to
take advantage of the opportunities
offered by this high-profile business
and networking platform. The Clarksons
gas chartering teams performed
exceptionally across 2023, particularly
in the LPG sector.
LNG
The LNG shipping market moved
400mt of liquefied natural gas in 2023
on a fleet of highly specialised vessels.
This sector is critical to both energy
transition and energy security,
particularly in the wake of the
Russia-Ukraine conflict and subsequent
diminishing of Russia-Europe gas
pipeline trade, and is set for a major
phase of expansion in the coming years.
LNG carrier market conditions
remained strong in 2023, though spot
rates dropped on an annual basis from
the record levels seen in 2022, largely
on the back of a narrower US LNG
export arbitrage and reduced security
of gas supply concerns. The headline
spot rate for a conventional 160k cbm
TFDE unit averaged US$97,100 per
day in 2023, down 26% year on year.
LNG tonne day demand was up 6.3%
to 7,553 million tonne days in 2023,
driven by longer voyage duration,
floating storage and higher LNG
trade flows. LNG tonne-mile demand
was up 3.3% year on year, driven by
higher LNG trade flows on long-haul
voyages. Global LNG trade volumes
rose by 2.0% to 413.7m mt in 2023,
as the US became the world’s largest
exporter. Meanwhile, project
sanctioning continued at a firm pace,
with over 40mtpa of liquefaction
capacity reaching FID, while a similar
volume could take FID in 2024.
Newbuild activity remained healthy
in 2023, with 64 LNG carriers ordered,
though this was down from the record
levels seen in 2022. Newbuild ordering
has started 2024 on a strong note,
with several berths declared for Qatari
units in early January 2024, while the
outlook for the rest of 2024 and
further beyond is positive.
Looking ahead, LNG tonnage demand
and freight rates in the first part of
2024 could be impacted by strong gas
inventory levels in Europe, while firm
fleet growth may impact rates later
in the year. However, Panama Canal
restrictions and Red Sea re-routing
could support freight, depending on
the level of disruption, while IMO and
EU ETS carbon regulations could also
impact productivity and tighten the
market. Clarksons remains very active
in the expanding LNG market, with
leading teams across spot, period,
newbuilding and sale and purchase.
Business review continued
38 Clarkson PLC
2023 Annual Report
Sale and Purchase (‘S&P’)
Secondhand
2023 was another active year for
secondhand sales activity, with over
2,200 vessels of a combined 130m dwt
reported sold across the full year, in line
with the 2022 total (which was the
second firmest level on record after
2021) and remaining around 32% above
the 10-year trend in tonnage terms.
Containership sales increased by 19%
year on year in 2023 to circa 800,000
TEU but remained well down from
the remarkable record 1.6m TEU set
in 2021, while bulkcarrier sales also
increased by 16% year on year to 55m
dwt. Activity in both sectors remained
above the average levels seen in the
previous 10 years. Tanker sales slowed
marginally in 2023 to 57m dwt, but
this was still the second highest level
on record (after 2022) and remained
41% above the 10-year trend.
Both Chinese and Greek owners
were particularly active in S&P markets
in 2023. Secondhand pricing in the
tanker sector continued to firm
through 2023, with our Tanker
Secondhand Price Index rising by
a further 16% to a new 15-year high
by the end of the year, on the back
of continued firm market conditions.
Our Bulkcarrier Secondhand Price
Index also increased, by 11%, while
our Containership Secondhand Price
Index declined by 12% across the full
year, taking the total decline since
early 2022’s 14-year high to 59%
by the end of the year.
Gas
400mt
Of LNG trade in 2023
Sale & Purchase – Secondhand
32%
Above the 10-year trend in 2023
for sales volumes
39Clarkson PLC
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Our global S&P broking teams saw
continued strong volumes in 2023 and
a healthy increase in the total value of
transactions, reflecting an increase in
tanker asset values which outweighed
weaker containership pricing. There
was also a focus on higher value
transactions which yielded notable
success in the larger tanker segments.
Our industry-leading expertise allowed
our teams to benefit from the firm
markets, with divisions globally
growing their market shares. We made
headcount investments in key regions
globally, cementing our market-leading
positions in London, Oslo, Singapore,
Tokyo and Athens. This expansion,
alongside a new team in Dubai, helped
drive progress forwards in 2023 and
positions the division well to leverage
opportunities in 2024, when volatility
and market dynamics relating to Red
Sea disruption and positive tonne-mile
growth trends look likely to remain
in focus.
Newbuilding
The newbuilding market saw a good
flow of orders in 2023, with ordering
volumes down in CGT and value from
2022, but up in dwt (by 5% to 109m
dwt). Tanker contracting increased
(albeit from a low base), with
bulkcarrier ordering up slightly.
Although containership ordering
eased back (by 43% in TEU), this still
represents historically high volumes,
supported by liner companies
continuing to invest in green fleet
renewal programmes. It was a record
year for car carrier orders (80 orders
of US$8.1bn) and there were also good
order volumes for gas carriers. There
were also some good volumes (and
with innovative alternative fuel/ESTs)
in the smaller ship market (for example
shortsea/MPP, offshore wind, ferry)
and, with the cruise market recovering,
some big ship project discussions
started. Reflecting the uptick in tanker
orders, Greek investors committed
60% more newbuild investment
(and their highest in dwt since 2013),
and European owners committed
more investment than Asian owners
for the first time in six years.
Sale & Purchase – Newbuilding
80
Car carrier orders of US$8.1bn,
a record year
Sale & Purchase – Newbuilding
50%
Tonnage by GT on order that
is alternative-fuel capable
Business review continued
40 Clarkson PLC
2023 Annual Report
Newbuild prices increased further
through 2023, supported by inflationary
pressures and increased forward cover
at yards. Our Newbuilding Price Index
rose by 10% across the year, and now
stands at the highest level since 2008
(within 7% of the 2008 peak, but still
down circa 35% on an inflation-adjusted
basis). Despite the good order flow, the
global orderbook backlog increased
only marginally across 2023 (by 4%
in CGT) to remain at historically low
levels (12% of fleet capacity). However,
the share of tonnage on order that is
alternative-fuel capable moved to
nearly 50% by GT. Global shipyard
output increased last year, by 11% to
36.5m CGT, with China delivering 50%
of output by CGT for the first time,
with Chinese yards also dominating
ordering (60% by CGT).
Our global newbuilding broking team
retained its market-leading position,
working with a wide range of major
cargo and industrial players globally
besides leading shipowners in each
sector on their fleet renewal
programmes. We were also very active
in placing alternative-fuel newbuild
orders for our clients, including dual-fuel
LNG, methanol and ammonia projects.
Offshore and Offshore Renewables
The offshore sector supports the
development, production and support
of offshore oil and gas fields and
renewables, with over 13,000 mobile
assets playing a vital role in supporting
operations across the lifecycle of
offshore energy projects.
Overall, 2023 saw continued
strengthening in the global offshore
market, with drilling and field
development activity increasing, and
the offshore renewables (wind) sector
continuing to expand. Global offshore
E&P spending increased, with capex
reaching an eight-year high. Utilisation
and dayrates have trended higher
across the segments to elevated levels,
driven by a combination of moderate
demand gains and a significant
reduction in supply of assets since the
cyclical downturn started in 2014/15.
With almost no new capacity coming
into the market, and with demand
expected to continue to strengthen
in 2024, the market outlook appears
optimistic for the coming years. We
expect our market-leading offshore
broking teams to continue to leverage
these market opportunities in 2024,
following a strong performance in
2023 that reflected our global scale
and deep expertise.
Drilling market
Mobile drilling units (comprising
jack-ups, semi-submersible units and
drillships) drill wells in the sea floor to
locate and facilitate extraction of oil
and gas. The rig markets strengthened
further in 2023, with demand
increasing and supply constrained.
Global floater utilisation rose to 90%,
the highest level since 2014, while the
jack-up segment also continued to
strengthen, particularly due to
significant contracting by Saudi
Aramco. Idle capacity is currently
limited, there are almost no remaining
stranded assets at shipyards and
stacked pools are largely exhausted.
The market outlook for next year
appears positive, with high offshore
activity levels providing more project
opportunities for contractors and
supporting demand for rigs.
Subsea field development market
The subsea sector involves the usage
of a range of assets, with capabilities
in lifting, pipelay, cable lay, diving and
ROV support, to install and maintain
subsea production infrastructure.
The subsea field development market
continued to improve in 2023, with
further increases in the backlog for
the major EPC contractors. The subsea
vessel market also continued the
improving trend that started in 2022,
with rates and contract durations
generally increasing. The main drivers
remain improving demand in subsea
oil and gas, combined with continued
demand for many of the same vessels
from the offshore wind sectors. The
outlook for 2024 appears positive,
with high offshore activity levels
supporting project opportunities for
smaller contractors and increasing
vessel demand.
41Clarkson PLC
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drives growthInvesting in breadth
Strategy in action:
What we achieved in 2023
We brought together our experts
from our Green Transition offering,
Investment Banking, Research and
Offshore Renewables to share their
views on the future of offshore
energy. This breadth of knowledge
and expertise is the foundation of
our integrated offer to our clients,
empowering them to make better
informed decisions, and us to lead
positive change.
Business review continued
42 Clarkson PLC
2023 Annual Report
Offshore support vessels
The OSV sector provides towage and
support duties to drilling rigs, mobile
production units and fixed production
platforms. The OSV market
strengthened significantly in 2023.
Demand increased across most regions
and tonnage availability remains
constrained, with virtually no newbuild
orders having been placed since 2014,
the stacked pool now standing close
to exhausted, and with few newbuilds
remaining at shipyards. There was a
sharp increase in sale and purchase
activity, with values rising. Rates are
expected to continue to move higher
due to lack of available capacity and
expected continued high demand.
Offshore renewables
The offshore renewables industry
continues to expand, and going
forward is expected to account for
a growing share of the global energy
mix supported by the increased focus
on decarbonisation and energy
security. However, the offshore wind
sector experienced some challenges
in 2023 amid pressures from inflation,
supply chain issues and delays. Still,
new project investment increased to
reach a new record, and construction
activity continues to run high. While
current sentiment amongst industry
stakeholders is mixed, the long-term
outlook for growth in the sector
remains very positive, and developers
are working to improve project
economics. Increased project
investment is expected in China and
the US next year, which could support
another new high in global capex
commitments. From a vessel
perspective, rate increases have been
notable across segments, and owners
are becoming more confident, with
end-users fixing earlier and for longer.
In the CSOV segment, a key sector for
Clarksons, limited deliveries in 2023
have led to more interest from
charterers, which is likely to keep rates
elevated in 2024. Following significant
investments in our broking and
advisory capacity, Clarksons has
developed a dedicated team focused
on the offshore renewables market
that is a market leader and performed
well during 2023 while leveraging
synergies with the Financial, Support
and Research divisions of Clarksons.
There has been a significant increase
in demand for specialised green
offshore vessels, particularly in the
offshore wind and renewables sector,
and we are actively engaging in
discussions with end-user clients
regarding technical green solutions
and initiatives. As more of the energy
mix shifts towards renewables,
offshore wind and renewables
is becoming a larger part of the
Clarksons offshore business. While
there remains uncertainty around
future technology choices and the
overall cost landscape, by leveraging
our expertise and forging partnerships
we continue to help stakeholders
navigate the evolving landscape and
contribute to the successful green
transition in the offshore sector.
Futures
Clarksons Futures is the leading
provider of freight derivative products,
helping shipping companies, banks,
investment houses and other
institutions seeking to manage freight
exposure by increasing or reducing
risk. It leverages the expertise and
market dynamics of the wider Group
to offer best-in-class execution
services to derivatives markets across
freight, iron ore and carbon. Against
the backdrop of increased regulatory
requirements, Clarksons Futures has,
with support from the wider Clarksons
team, positioned itself at the forefront
of the sector.
2023 was a positive year for Tanker
FFAs, with the desk remaining a strong
market leader, reaching new records
in terms of volumes, and bringing in
new counterparts. Prospects for 2024
appear positive with a continued
stream of new market participants.
In the dry futures business, lower rates
led to a tough start to the year, but as
the year progressed volumes reached
new highs, negating the impact of
lower rates. In the fourth quarter,
the combination of high volumes and
stronger rates led to a strong close.
The swaps business grew, with our
market share increasing significantly
late in the year. In the options market,
our market share increased again.
Our Dry FFA team benefited from
strategic hires in 2023, developing
synergies with the securities team in
Oslo and improved technology tools.
43Clarkson PLC
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Securities
General
Clarksons Securities is a sector-focused
investment bank for the shipping,
offshore energy, renewables and
minerals industries, with deep sector
knowledge and global reach driven
by research and relationships. In 2023,
activity in Clarksons Securities’ core
sectors was positive relative to a
backdrop of continued volatility in
commodity prices, interest rates and
credit spreads, but also with underlying
markets generally improving.
Investment banking performance was
supported by firmer activity in the
debt capital markets which more than
offset slower equity capital markets.
Offshore energy services was the
strongest performing sector, with
transactions completed across the
product offering, testament to
Clarksons Securities’ long-standing
relationships and its ability to provide
actionable advice to clients through
the market cycle. Revenues from
secondary trading also rose, both
in bonds and equities; and a number
of companies within oil services
completed refinancings in 2023,
attracting interest from generalist and
‘long-only’ funds. Clarksons Securities
remains the preferred adviser and
speaking partner for its clients, creating
opportunities by connecting capital
and good ideas within its core sectors.
Shipping
In 2023, shipping stocks experienced
a modest performance, with continued
good cashflow and upward pressure
on asset pricing in a number of
sectors. Capital markets activity
remained muted, with listed shipping
companies largely remaining focused
on returning capital to shareholders
and de-leveraging balance sheets.
Nonetheless, Clarksons Securities was
active, participating in IPOs in both
Oslo and New York, multiple capital
raisings and leasing transactions.
Energy services
Capital markets activity within
offshore energy services continued
to strengthen in 2023, driven by
increased investor appetite, despite
ongoing macro-economic uncertainty
(although the markets for offshore
wind vessel owners became more
challenging with increased uncertainty
around project economics impacting).
Clarksons Securities capitalised by
executing a range of transactions for
its clients, with refinancing of existing
debt facilities in the high yield bond
market contributing significantly to
overall transaction volumes.
Financial
From full investment banking
services to project finance
and bespoke asset solutions,
for the shipping, offshore
and natural resources markets,
our Financial division plays
a critical role in our integrated
offering for clients.
Business review continued
£44.1m
2022: £49.8m
115
2022: 112
£6.6m
2022: £7.8m
Share of revenue Segmental split of underlying
profit before taxation
Employees
Services:
– Securities
– Project finance
– Structured asset finance
44 Clarkson PLC
2023 Annual Report
drives growth
Strategy in action:
What we achieved in 2023
Clarksons Securities was engaged
by Ocean Ventus to help find
financing and strategic partners
for their end-to-end solution to
deliver cost-competitive power
from floating wind. Our deep
knowledge of the offshore wind
sector and our understanding
of our client’s needs meant that
we were uniquely placed to win
this mandate.
Investing in understanding
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Metals and minerals
2023 saw continued volatility in
the metals and minerals sector driven
by uncertainty around demand for
industrial/infrastructure-related
commodities, and in future-facing
sectors, including battery-related
minerals. Clarksons Securities
participated in multiple transactions
during the year across products and,
whilst seeing continued support
from the industrial minerals segment,
remains well positioned to assist clients
in meeting demand for commodities
driven by the green transition.
Renewables
The renewable energy sector
continues to see impressive growth.
Traditional technologies such as wind
and solar are continuing to expand
while emerging technologies such
as hydrogen and carbon capture and
storage are developing significantly
and the expansion of the dedicated
offshore wind fleet requires substantial
capital funding. However, as expected,
2023 proved to be a slower year for
transactions across the renewable
energy sectors, though M&A and
private equity markets remain firm.
Last year, the Clarksons Securities
renewables team completed
transactions for public and private
clients within sectors such as solar,
hydrogen, e-fuels, charging
infrastructure and heat pumps,
and maintains a healthy pipeline
of transactions.
Exploration & Production (‘E&P’)
Against a backdrop of renewed global
activity in oil and gas E&P in recent
years, particularly offshore, Clarksons
Securities aims to work with high
quality assets and operators to develop
oil and gas fields fit for the future.
In 2023, following the return to a focus
on E&P in the previous year, the team
continued to develop.
Debt capital markets
Following a challenging 2022 in the
credit markets, 2023 saw increased
primary activity supported by improved
risk appetite and ample cash positions
among investors, despite an uncertain
macro-economic outlook and rising
interest rates. With the oil services
sector seeing a resurgence, capital
markets opportunities emerged for
international drilling and offshore
companies and Clarksons Securities
engaged in a firm volume of debt
capital market transactions. At the end
of 2023, falling corporate capital costs
coupled with robust investor confidence
and liquidity looked set to stimulate
good volume in the credit markets.
Project finance
Our project finance business is a
leading Nordic player within shipping
and real estate project finance, which
in recent years has offered investment
opportunities in modern fuel (and
carbon) efficient shipping and offshore
assets, with a focus on assisting the
shipping and offshore industry in
transitioning to be more sustainable
and less carbon-intensive. 2023 was
an active year in the Norwegian
project finance market and our team
structured and placed a number
of new projects across the dry bulk,
containership, offshore, tanker and
expedition cruise sectors whilst asset
sales across tankers, offshore and dry
bulk generated strong cash returns
for investors.
The real estate market in Norway in
2023 was heavily impacted by high
inflation, rising interest rates and
macro-economic uncertainty, and
market activity weakened with
investor sentiment. These conditions
made 2023 the most challenging year
in recent times and impacted our real
estate business. Overall transaction
volumes were down on 2022, although
activity was maintained throughout
the year. 2023 also saw the first
investment from one of the team’s
newly established real estate funds.
Structured asset finance
Our structured asset finance business
maintains relationships with asset
financiers globally including around
their activities and headline terms,
with a view to helping our broking
clients understand the sources of
finance available to them and providing
introductions where relevant. It acts
as an exclusive mandated financial
adviser, structurer and arranger
working closely with newbuilding and
strategy teams on large long-term
strategic procurement projects for
end-users and cargo interests.
2023 was characterised by reductions
in leverage and the re-financing of
existing facilities on lower margins, as
owners reacted to increased liquidity
from improved earnings. This was
partially offset by the higher interest
rate environment, increased liquidity
costs and corresponding upward
pressure on margins for some of the
mainstream traditional shipping banks.
Business review continued
46 Clarkson PLC
2023 Annual Report
The mortgage-backed debt market
appears ‘three-tiered’. Firstly, the
Poseidon Principles group of banks,
aligning their portfolios to key (now
‘net zero’ and ‘well-to-wake’) emissions
targets, continues to focus on lending
to top-tier borrowers, linked to ‘green’
vessels and/or sustainability-focused
projects. Secondly, banks outside this
group, especially in Cyprus, Greece
and Scandinavia, remain a competitive
source able to focus on opportunities
to finance or re-finance tonnage,
especially for slightly older units and/
or projects with less ‘green’ credentials
(although new EU reporting rules
may place pressure on these shipping
banks to focus on more fuel-efficient
vessels). Thirdly, a growing tier of
mortgage-backed debt lenders
includes credit funds and the providers
of private credit facilities, typically
seeking higher margins but offering
reasonable leverage and with appetite
for a far wider range of tonnage.
Leasing remains the other main
asset-backed finance product in the
shipping sector and here the market
is also tiered. The first tier, comprising
the larger Chinese leasing companies
but also including (for transactions
that qualify) the growing French tax
lease product and to a lesser extent
the Japanese tax-based JOLCO
product, is able to compete with the
mainstream traditional shipping banks,
Fleet value
US$1.7 trillion
Value of the world fleet and
orderbook today.
Offshore
110
Clarksons Offshore Day Rate Index,
the highest level since 2008
and saw portfolios increase during
2023. The second tier comprises
some of the smaller Chinese leasing
companies, some European leasing
companies, and some of the credit
funds that also offer leasing products.
This sector has seen some of the
largest early repayments over the
last year due to increased borrower
earnings. Overall, although debt
service visibility remains a key criterion
for all asset-based financiers, there
is capacity available to be deployed
to finance ’good’ projects.
The Clarksons structured asset finance
business had a successful 2023,
concluding further mandates with
a number also active going into 2024.
It continues to fulfil a specific highly
value-adding role, with an excellent
reputation and first-class execution
track record. Against a backdrop of
developing sources of asset finance,
the emergence of alternative fuels
and propulsion methods and growing
ESG considerations, and with a range
of financing choices available to
our clients for longer-term strategic
tonnage procurement, we continue
to provide highly valuable expertise
and service.
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Stevedoring
In 2023, our stevedoring business,
highly experienced in loading and
discharging bulk cargoes, performed
much in line with expectations. Export
volumes began the year strongly,
but the second half of the year was
adversely affected by weakened UK
grain harvest volumes that reduced
both the harvest quality and the
exportable surplus. Nonetheless the
year as a whole saw export tonnage
rise by 64,000 tonnes. Import
volumes were in line with expectations
and down by 35,000 tonnes, in part
due to the very high stock in store for
a leading customer at the end of 2022.
Shortsea broking
Following exceptional freight rates in
2022, our shortsea broking business
which, with specialist skills, in-depth
knowledge and strong relationships,
provides market-leading brokerage
services for shortsea dry cargo
shipping, saw market freight levels
down circa 35% in 2023, though
still ahead of long-term averages.
This, coupled with lower grain volumes
shipped, saw revenues fall last year.
The business has been planning
diversification away from its traditional
reliance on agricultural volumes,
working in conjunction with other
parts of the Clarksons Group, and
expects to see revenues from the
transportation of scrap markedly
improve in the future.
Agency and customs clearance
Through exceptional port agency
and first-class logistics services, our
business provides a range of solutions
for clients in the marine and energy
sectors. Aside from an anticipated
reduction in trading volumes (related
to the reversion to more normal
container freight markets), in 2023 the
business generally met expectations.
A market need for customs advice was
recognised, particularly in the offshore
renewables market. Working with
windfarm developers and their suppliers
offers consultancy opportunities going
forward. The acquisition of DHSS early
in 2023 allowed the UK business to
extend its services to include (from
the fourth quarter) helicopter transfer
crew changes, initially from Aberdeen.
As windfarms on average are
becoming located further offshore,
helicopter transfers become more
central to customer needs.
Support
Our teams provide the
highest levels of support with
24/7 attendance at a range of
strategically located ports in
the UK, mainland Europe and
Egypt, offering a wide range
of services to the marine and
offshore industries.
Business review continued
£56.6m
2022: £39.0m
383
2022: 306
£6.4m
2022: £5.0m
Share of revenue Segmental split of underlying
profit before taxation
Employees
Services:
– Stevedoring
– Shortsea broking
– Agency and customs clearance
– CPS BV
– Gibb Group
– Egypt agency
48 Clarkson PLC
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drives growth
Strategy in action:
What we achieved in 2023
Our Clarkson Port Services
(‘CPS’) business acquired DHSS,
an offshore renewable energy
provider, in February 2023.
Based in the Netherlands, and
with a presence across a number
of ports in the Netherlands,
DHSS’s activities and locations
were complementary to CPS’
existing strengths in the offshore
renewable energy sector,
providing us with the opportunity
to extend our reach into larger
offshore renewables contracts
internationally.
Investing in reach
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Clarkson Port Services B.V. (‘CPS BV’)
DHSS was acquired in February 2023,
and its performance exceeded
expectations in the remainder of
the year. The business was rebranded
CPS BV and fully integrated into the
Clarksons Group. Its commercial
team has dovetailed with the existing
business and this has led to fresh
income both in the UK and in the
Netherlands. Meanwhile, we have
invested in a new quayside multi-user
office, warehouse and yard facility
in Eemshaven, which will meet
considerable customer demand as an
installation and O&M base for offshore
energy projects. CPS BV is very well
placed to take advantage of the
quickly developing offshore energy
market in the UK, Dutch and German
sectors of the North Sea.
Gibb Group
Gibb Group is the industry’s leading
provider of PPE and MRO products
and services as well as one of the
offshore renewable energy sector’s
most experienced, qualified suppliers.
In 2023, the business saw revenue and
profits grow as it continued to respond
to customer demand and the growth
of offshore energy by opening a new
facility in Rhode Island which will
begin trading from 2024; relocating
its Aberdeen facility into a much larger
modern facility and investing in that
new facility to allow its Safety &
Survival business to expand markedly;
investing in further staff and facilities
in IJmuiden; and developing its
Middlesbrough location to meet rapidly
growing customer demand for locally
serviced needs. We expect to open
a new facility in Immingham in 2024
to meet the growing customer needs
in the region as further windfarm
development is announced at locations
close to the Humber. We have also
recognised changing customer needs
for hire fleet assets, and additional
service, inspection and repair, on site
and on customers’ premises.
Egypt agency
The Suez Canal is a vital trade route
between Europe and Asia, and our
regional experts in Egypt deliver
on-the-ground expertise around transit
and port agency. Our Egypt agency
business proved successful in 2023
despite regional geo-political
pressures, developing strategic
partnerships with major clients and
local authorities. Increased canal
transits and port calls (especially grain
volumes) saw the business gain market
share, whilst chartering revenues were
down in 2023 and liner service activity
was steady. Significant opportunities in
the Egyptian market remain, although
late in the year Suez Canal transits and
activity in the region were disrupted
by events around the Bab al-Mandab
Strait, which has led to significant
uncertainty over future trends.
Offshore renewables
>30 GW
Of active European offshore wind
capacity today
Offshore oil and gas
10 years
Highest day rates in the North Sea
OSV market for 10 years
Business review continued
50 Clarkson PLC
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Clarksons Research, the data
and analytics arm of Clarksons,
is a market-leading provider of
independent data, intelligence and
analysis around shipping, trade,
offshore and energy transition in
the maritime context. Millions of data
points are processed and analysed
each day to provide trusted and
insightful intelligence to support the
workflows and decision-making of
thousands of organisations across
the increasingly complex and dynamic
maritime industry.
Research performed strongly
across 2023. Continuing a long-term
growth trajectory, with high levels of
recurring revenue and client retention,
Research provided a unique flow of
market-leading sector research and
data across the year, including a focus
on the building complexities in global
trade and developments around
maritime energy transition. Our
Research output also continues to
support the Broking, Financial, Support
and technology businesses of Clarksons
with differentiating data, intelligence
and profile.
Our strategy to provide leading data
and insights around the green transition
continues, meeting strong client
appetite to understand the maritime
sector’s decarbonisation pathway.
This has included tracking of shipping’s
carbon footprint and increasingly
complex emissions regulation;
monitoring green technology uptake
including alternative fuel; and
understanding impacts on shipping’s
cargo base and activity as energy
transition develops while important
global energy security is also managed.
We are also focusing investment into
our research and understanding of
global maritime trade flows as they are
increasingly impacted, and disrupted,
by geo-political developments, helping
meet growing client requirements.
Organisationally, we continue to invest
in our people and are implementing
headcount growth across our teams
with a specific focus on IT development,
data analytics and sales. Our strong
Asian and emerging market position
was cemented by the expansion of our
operations in Delhi in 2023. Following
a successful external audit in June,
Clarksons Research has been awarded
ISO 27001 information security
standard certification.
Research
Clarksons Research delivers
market-leading proprietary
data to both our teams and
our clients to enable better
decision-making.
£21.9m
2022: £19.5m
141
2022: 122
£8.4m
2022: £7.0m
Share of revenue Segmental split of underlying
profit before taxation
Employees
Services:
– Digital
– Services
51Clarkson PLC
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drives growth
Strategy in action:
What we achieved in 2023
With geopolitics driving
increasingly complex and
disrupted trade patterns, our
focus on trusted intelligence is
more vital than ever. In December
2023, we quickly launched the
first of a series of briefings and
impact assessments around
Red Sea disruption, supporting
vital understanding of impacts
on shipping markets and the
broader global economy.
Business review continued
Investing in trust
52 Clarkson PLC
2023 Annual Report
Digital
Sales across our digital platform grew
by an encouraging 21% year on year,
supported by our product investment
strategy, a constant flow of high-quality
and market-relevant analysis and an
expansion of the depth and breadth
of our wide-ranging proprietary
database. The benefits of our major
2022 upgrade roll-out, and individual
improvement programmes for each
product, continue to be realised. Our
platform provides immediate access
to our intelligence for over 4,000
maritime companies and 12,000
individual users via a single-access
integrated platform.
Principal digital products include:
– Shipping Intelligence Network
(‘SIN’) provides wide-ranging data
and analysis tracking and projects
shipping market supply and demand,
freight, vessel earnings, indices,
asset values and macro-economic
data around trade flows and global
economic developments. Sales of
SIN increased significantly across
the year as we closely tracked
Chinese economic trends and
growing disruption and complexity
in maritime trade, including Ukraine
grain exports, Panama Canal
restrictions and, at the close of the
year, Red Sea disruption. Our Red Sea
impact assessments were particularly
well received and sourced across
the global business media. Shipping
market themes tracked on SIN
across the year included: tanker,
gas, car carrier and offshore
markets that experienced strong
conditions; soft bulk carrier markets
but an improved fourth quarter;
weak container market conditions
but a late rally following Red Sea
disruption; building complexities
in global trade as it reached
12.3bn tonnes; a shipping supply
side experiencing low orderbooks
and some limitations in shipbuilding
capacity; and growing market
impacts from emissions policies.
– World Fleet Register (‘WFR’)
provides data and intelligence
around the world fleet, vessel
equipment and technology,
companies, shipbuilding, emissions
regulation, fuelling transition and
alternative fuels. A focus on
tracking green technology and
decarbonisation across the shipping
industry, aligning with the broader
Group’s investments around the
green transition, helped support
a robust increase in sales of WFR.
During the year, impact assessments
around new IMO short-term
measures and the EU ETS were
released. A new dashboard on ship
repair and green technology
retrofits was released in late 2023
and progress towards the release of
data focused on ‘green’ investments
at ports and vessel activity analytics
dashboards continues.
– Offshore Intelligence Network
(‘OIN’) provides data and analysis
of utilisation, day rates and market
supply and demand of the offshore
fleet including rigs, OSVs, subsea
and floating production. Sales of
OIN are up robustly year on year;
there has been a positive product
upgrade over 2023; and there is
a good pipeline of client enquiry.
Market improvements in the offshore
oil and gas vessel markets, alongside
an energy security focus, continued
in 2023, with OIN now tracking
14-year high day rates and an offshore
oil and gas industry contributing 16%
of global energy supply.
Digital
12,000
Individual users of
our digital platform
Digital
180,000+
Vessels we hold data and
intelligence on
53Clarkson PLC
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– Renewables Intelligence Network
(‘RIN’) provides comprehensive
data, intelligence and analysis
around every offshore wind farm
in the world and the fleet of vessels
that support development and
maintenance. Although the offshore
wind market experienced some
weaker sentiment in 2023 due to
inflationary pressures and some
project slippage, we still believe the
industry will play a vital role in global
energy transition (we forecast growth
from 13,000 turbines offshore today
to 28,000 by 2030) and project it
could provide between 7% and 9%
of global energy supply by 2050
(today it is 0.4%). Vessel markets
remained relatively tight with
improvements in day rates. Despite
the weaker backdrop, RIN saw good
sales growth and we continue
to invest heavily in the platform.
We are increasingly working with
the insurance industry to provide
reference data on offshore wind
infrastructure and believe this will
lead to good sales opportunities.
– Sea Net has been developed
in conjunction with the Clarksons
technology business, Maritech.
This vessel movement system
blends satellite and land-based AIS
data with the Clarksons Research
leading database of vessels, ports
and berths. Working with Maritech,
Research continues to improve the
depth of our underlying movement
and deployment data.
Business review continued
54 Clarkson PLC
2023 Annual Report
Services
Our dedicated services and
consultancy team was very active
during the year, focusing increasingly
on data contracts to key corporates
across maritime (increasingly via
API delivery) and multi-year research
agreements. There was strong client
attendance at our shipping and
offshore forecasting forum events in
March 2023 and September 2023 while
the team also worked successfully on
a number of IPO industry sections.
The Research client base continues to
expand and diversify, building strong
long-term relationships with leading
companies involved in maritime and
with good market penetration across
shipowning, charterers, shipbuilding,
marine equipment, oil service,
insurance and government.
Clarksons Valuations, the market-leading
provider of authoritative, consistent
and independent valuation services
to shipowners and financiers,
continues to successfully invest in
analysis and technology to support
financial institutions, including to meet
new European Banking Authority
guidelines on valuations and to
understand the emissions profile of
their debt portfolios and the impact of
technology and emissions policies on
value. The valuations team performed
well in 2023, with good volumes and
sales, and was active in supporting
the S&P broking teams of Clarksons.
Renewables Intelligence Network
28,000
Offshore wind turbines projected
for 2030 (from 13,000 turbines today)
Offshore Intelligence Network
16%
Of global energy supply
from offshore oil and gas
55Clarkson PLC
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Technology
2023 has been a
year of strong growth
and progress for our
technology arm, Sea,
with good product
development, expansion
in client base and the
execution of strategic
acquisitions and
new partnerships.
Sea is now focused around three
business areas. Firstly, the long-term
development of our platform
supporting the digitalisation of freight
and fixtures (‘the intelligent marketplace
for fixing freight’); secondly, our digital
platform for soft commodity contracts
(‘the intelligent contracts platform for
commodities’); and thirdly, our custom
software development team. During
2023, Sea has made significant progress
in all three of these areas, resulting
in significant revenue and customer
growth. We are strongly committed
to ‘powering better decisions to
enable sustainable shipping’.
Intelligent marketplace
Over the past year, the positive
development of our single platform
connecting charterers, brokers
and owners through streamlined
pre-fixture workflows continued.
The platform enables greater
collaboration and stronger governance
across the chartering ecosystem,
while also allowing users to optimise
their freight and emissions. In addition
to our continued platform development,
we made important strategic moves
in 2023, including the acquisitions
of MarDocs and Chinsay (which
Sea acquired in late 2022) and the
successful migration of all customers
to a consolidated platform. In addition,
Sea took full control of Recap Manager,
the leading online tool for the tanker
sector, thus creating the leading
contract management platform
for the shipping industry resulting
in over 45,000 charterparties and
recaps being conducted on our
platform. During the year we have
significantly expanded the client base,
widening the network of charterers,
brokers and owners on our platform
and receiving positive feedback from
across the customer base on our
development pathway.
We have also expanded our network
of industry-leading partners, allowing
us to provide an increasingly seamless
user experience to our client base.
We implemented a successful brand
refresh during the year, providing
a new visual identity and website
upgrade while showing the direction
of our business and our purpose of
‘powering better decisions to enable
sustainable shipping’. During the year
we gained new customers, expanded
current engagements and developed
new solutions as we cement our
position as ‘the intelligent marketplace
for fixing freight’.
Business review continued
56 Clarkson PLC
2023 Annual Report
ICP commodities
The ICP commodities platform,
acquired as part of our acquisition of
Chinsay, delivers an industry-leading
solution. Whenever a commodity is
being transacted there is a need for
a standardised and digitised contract
to form the basis of the transaction.
ICP commodities provides this,
enabling data-driven decision-making
and insights to commodities trading.
We expanded existing customer
relationships and gained new customers
in 2023. We expect continued growth
in this business unit, along with a
potential workflow connection between
our commodity contract and freight
transaction platforms in the future.
Custom software development
The development of our custom
software development business
unit follows our full integration with
Setapp (acquired in the fourth quarter
of 2022). The team’s expertise in
maritime software development has
been instrumental in creating bespoke
software solutions for our customers,
while allowing Sea to insource all
software development and drive
down our cost base.
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Our stakeholders
Our clients Our people Our communities Our shareholders
Who they are
We have over 5,000 clients globally
which includes charterers, vessel
owners, trust funds, investors
and ship agents.
What they care about
– Integrity
– Quality of service
– Expertise
– Trusted advisor
– Innovation and technology
– Market leadership
– Sustainable products and solutions
– Business conduct
Why they are important to us
As the world’s leading provider
of integrated shipping services,
our market-leading technology and
intelligence set us apart. This allows
us to influence client decisions at
every step of the shipping lifecycle
and form the trusted partnerships
with our clients that continue to
drive our business.
How we engage with them
Adopting a bespoke approach is key
to how we engage with our clients.
This includes:
– Client meetings and presentations
– Client forums
– Client feedback and input
into product development
– Social media
– Website
Issues raised during the year
– Decarbonisation of the industry,
including the fuelling transition
(transition in the industry away
from conventional fuels for vessels),
energy transition (impact on trade
flows of changes in energy usage)
and growth of the offshore
renewables market
– The digital transformation
of the industry
– Impact of geo-political uncertainty
on trade flows and supply chains
Actions and outcomes
– Continued focus from the
Green Transition team on working
with clients on understanding
evolving regulations and broader
decarbonisation strategies
– Continued investment in and
development of technological
solutions (eg to facilitate
decision-making to support
decarbonisation of the industry,
and to support negotiation and
management of freight transactions)
– Continued development of our
sanctions compliance programme
Who they are
We have over 2,000 employees across
more than 60 offices in 24 countries.
What they care about
– Client relationships
– Maintaining market position
– Broad experience and leading
the way in industry change
– Culture and values
– Training and development
– Employer brand
– Reward and benefits
– ESG
Why they are important to us
As a trusted advisor to our clients
leveraging market-leading intelligence
enabled by technology, our people are
our biggest asset. We continually strive
to engage, develop and retain them.
How we engage with them
– Leadership and divisional
management forums
– Employee Voice Forum
– Global conferences
– Active management
– Internal communications channel
(Voyage)
– Social media
– Digital platforms
– Social and networking opportunities
– CSR activities
Issues raised during the year
– The green transition
– Strategic client engagement
– Leadership in complex global markets
– The digital transformation
of the industry
– ESG agenda
– CSR priorities
Actions and outcomes
– New training and development
and cross-business collaboration
on key market developments around
digitisation and the green transition
– Funding and supporting charitable
causes that are meaningful to
our people and communities
– Enhancement of mental
health-focused benefits provided
to employees
– Evolution of ways of working and
bringing the Group together: new
channels of communication, new
networks of collaboration and a
consistency of knowledge sharing
– Continued focus on leading
with compassion and empathy,
and enhancement of focus on
management and leadership
skills and competencies
– Conducted our first ESG materiality
assessment, developing a
framework that will provide the
foundation of an ESG action plan
Who they are
The shipping community,
industry-related partnerships
and the wider communities
in which we operate.
What they care about
– Authoritative data and intelligence
– Sustainability
– Clarksons as a responsible
company
– Employment opportunities
– Charities and community causes
Why they are important to us
All participants in the wider shipping
community play an important role
in shaping the industry in which we
operate, as well as being our current
and potentially our future clients.
Furthermore, we want to have a
positive and lasting impact on
communities, and fundamentally
believe that behaving in a socially
responsible way is the right thing
to do.
How we engage with them
– Publications and our database
– Sharing of expertise and knowledge
through participation in industry
forums and employee directorships
of shipping-related boards
– Industry partnerships
– Volunteering
– Charitable donations
– Social media
Issues raised during the year
– Decarbonisation of the industry,
including the fuelling transition
(transition in the industry away
from conventional fuels for
vessels), energy transition
(impact on trade flows of changes
in energy usage) and growth of
the offshore renewables market
Actions and outcomes
– Continued support of already
established industry partnerships
and establishment of new
partnerships
– Provision of Sea technology
modules to maritime universities
at a heavily reduced price
– Focus on our local communities
through charitable giving and
employee volunteering
– Continued charitable giving
by The Clarkson Foundation
– Conducted our first ESG
materiality assessment, developing
a framework that will provide the
foundation of an ESG action plan
Who they are
Our shareholders range from
small private investors to large
institutional investors.
What they care about
– Operating and financial
performance
– Strategy and outlook
– Shareholder value creation
– Dividend policy
– ESG performance
– Remuneration
Why they are important to us
Our shareholders own our business
and provide us with the capital
that enables us to continue to grow
the business.
How we engage with them
– One-to-one meetings
– Investor roadshows
– Capital markets days
– Analyst briefings
– Half year and full year
results presentations
– Annual Report
– AGM
– Website
Issues raised during the year
– Sustainability matters
– Diversity
– Executive remuneration
– Succession planning
Actions and outcomes
– Continued strong financial
performance
– Maintenance of the Company’s
progressive dividend policy
– Enhanced understanding
of the Company’s executive
remuneration structures
– Conducted our first ESG
materiality assessment, developing
a framework that will provide the
foundation of an ESG action plan
Committed to effective
engagement with our
stakeholders, enabling us
to respond to their needs
in a fast-changing world
58 Clarkson PLC
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Our clients Our people Our communities Our shareholders
Who they are
We have over 5,000 clients globally
which includes charterers, vessel
owners, trust funds, investors
and ship agents.
What they care about
– Integrity
– Quality of service
– Expertise
– Trusted advisor
– Innovation and technology
– Market leadership
– Sustainable products and solutions
– Business conduct
Why they are important to us
As the world’s leading provider
of integrated shipping services,
our market-leading technology and
intelligence set us apart. This allows
us to influence client decisions at
every step of the shipping lifecycle
and form the trusted partnerships
with our clients that continue to
drive our business.
How we engage with them
Adopting a bespoke approach is key
to how we engage with our clients.
This includes:
– Client meetings and presentations
– Client forums
– Client feedback and input
into product development
– Social media
– Website
Issues raised during the year
– Decarbonisation of the industry,
including the fuelling transition
(transition in the industry away
from conventional fuels for vessels),
energy transition (impact on trade
flows of changes in energy usage)
and growth of the offshore
renewables market
– The digital transformation
of the industry
– Impact of geo-political uncertainty
on trade flows and supply chains
Actions and outcomes
– Continued focus from the
Green Transition team on working
with clients on understanding
evolving regulations and broader
decarbonisation strategies
– Continued investment in and
development of technological
solutions (eg to facilitate
decision-making to support
decarbonisation of the industry,
and to support negotiation and
management of freight transactions)
– Continued development of our
sanctions compliance programme
Who they are
We have over 2,000 employees across
more than 60 offices in 24 countries.
What they care about
– Client relationships
– Maintaining market position
– Broad experience and leading
the way in industry change
– Culture and values
– Training and development
– Employer brand
– Reward and benefits
– ESG
Why they are important to us
As a trusted advisor to our clients
leveraging market-leading intelligence
enabled by technology, our people are
our biggest asset. We continually strive
to engage, develop and retain them.
How we engage with them
– Leadership and divisional
management forums
– Employee Voice Forum
– Global conferences
– Active management
– Internal communications channel
(Voyage)
– Social media
– Digital platforms
– Social and networking opportunities
– CSR activities
Issues raised during the year
– The green transition
– Strategic client engagement
– Leadership in complex global markets
– The digital transformation
of the industry
– ESG agenda
– CSR priorities
Actions and outcomes
– New training and development
and cross-business collaboration
on key market developments around
digitisation and the green transition
– Funding and supporting charitable
causes that are meaningful to
our people and communities
– Enhancement of mental
health-focused benefits provided
to employees
– Evolution of ways of working and
bringing the Group together: new
channels of communication, new
networks of collaboration and a
consistency of knowledge sharing
– Continued focus on leading
with compassion and empathy,
and enhancement of focus on
management and leadership
skills and competencies
– Conducted our first ESG materiality
assessment, developing a
framework that will provide the
foundation of an ESG action plan
Who they are
The shipping community,
industry-related partnerships
and the wider communities
in which we operate.
What they care about
– Authoritative data and intelligence
– Sustainability
– Clarksons as a responsible
company
– Employment opportunities
– Charities and community causes
Why they are important to us
All participants in the wider shipping
community play an important role
in shaping the industry in which we
operate, as well as being our current
and potentially our future clients.
Furthermore, we want to have a
positive and lasting impact on
communities, and fundamentally
believe that behaving in a socially
responsible way is the right thing
to do.
How we engage with them
– Publications and our database
– Sharing of expertise and knowledge
through participation in industry
forums and employee directorships
of shipping-related boards
– Industry partnerships
– Volunteering
– Charitable donations
– Social media
Issues raised during the year
– Decarbonisation of the industry,
including the fuelling transition
(transition in the industry away
from conventional fuels for
vessels), energy transition
(impact on trade flows of changes
in energy usage) and growth of
the offshore renewables market
Actions and outcomes
– Continued support of already
established industry partnerships
and establishment of new
partnerships
– Provision of Sea technology
modules to maritime universities
at a heavily reduced price
– Focus on our local communities
through charitable giving and
employee volunteering
– Continued charitable giving
by The Clarkson Foundation
– Conducted our first ESG
materiality assessment, developing
a framework that will provide the
foundation of an ESG action plan
Who they are
Our shareholders range from
small private investors to large
institutional investors.
What they care about
– Operating and financial
performance
– Strategy and outlook
– Shareholder value creation
– Dividend policy
– ESG performance
– Remuneration
Why they are important to us
Our shareholders own our business
and provide us with the capital
that enables us to continue to grow
the business.
How we engage with them
– One-to-one meetings
– Investor roadshows
– Capital markets days
– Analyst briefings
– Half year and full year
results presentations
– Annual Report
– AGM
– Website
Issues raised during the year
– Sustainability matters
– Diversity
– Executive remuneration
– Succession planning
Actions and outcomes
– Continued strong financial
performance
– Maintenance of the Company’s
progressive dividend policy
– Enhanced understanding
of the Company’s executive
remuneration structures
– Conducted our first ESG
materiality assessment, developing
a framework that will provide the
foundation of an ESG action plan
59Clarkson PLC
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Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Section 172 statement
Understanding what
matters to our shareholders
and how our decisions
impact them
The Board recognises the value
of building strong relationships with
our stakeholders to gain a better
understanding of what matters to
them and how our decisions will
impact them.
This helps to inform our decision-making,
deliver our strategy in a sustainable
way and meet our stated purpose.
We are therefore committed to effective
and regular engagement with each
of the Company’s stakeholders
(as set out on pages 58 and 59).
The Board engages directly
with shareholders and employees,
and we receive regular updates
from the Executive Directors on
how management engages with other
stakeholders. Further information
can be found on direct engagement
activities on pages 112 and 113 and
on the Company’s engagement with
its stakeholders more generally on
pages 58 and 59.
In their discussions during the
year ended 31 December 2023, the
Company’s Directors have acted in the
way that they consider, in good faith,
would be most likely to promote the
success of the Company for the benefit
of its members as a whole (having
regard to stakeholders and the matters
set out in subsections 172(1)(a)-(f) of
the Companies Act 2006). The Board
considers these matters in all its
discussions and decision-making,
as set out on the next page.
60 Clarkson PLC
2023 Annual Report
The likely consequences of
any decision in the long term:
The Directors recognise the need to
take a long-term view in every decision
that they take to ensure the continued
growth of a sustainable business.
Read more:
Our business model on pages 22 and 23.
Our strategy on pages 30 and 31.
Principal risks on pages 68 to 71.
Viability statement on pages 72 and 73.
The interests of the Company’s
employees:
Our people are at the heart of how
we engage with each other, our clients,
and the products and services that we
provide. As our biggest differentiating
factor, engagement with our
employees is key to our success.
The Board engages with members of
the Executive Team through business
presentations at Board meetings.
In addition, the attendance of our
Employee Engagement Director
(Heike Truol) at meetings of our
Employee Voice Forum provides a
further means of ensuring two-way
communication – Heike shares
employee views and feedback with
the Board following each meeting
of the Forum, and updates the Forum
on relevant Board matters. Heike’s
updates help us to take account of
the interests of our employees when
taking decisions. Our Executive
Directors also provide updates on
people matters at each Board meeting.
Read more:
Our stakeholders on pages 58 and 59.
Our impact on pages 84 to 89.
Purpose, values, behaviours and culture
on pages 110 and 111.
Stakeholder engagement on page 112.
The need to foster the Company’s
business relationships with suppliers,
customers and others:
Our client base is diverse in terms of
both size and needs, and our brokers’
approach to engaging with our clients
is bespoke to, and driven by, each
client’s needs. The most meaningful
way for the Board to receive feedback
gathered through this engagement
is therefore through updates from
management, including through the
CEO’s regular update to the Board
and business presentations made
by senior management. Trends in the
marketplace and client feedback on
products are also key elements that
the Board takes into account in
evolving the Group’s strategy.
As with our clients, our stakeholders
in the shipping community are
diverse and management takes
an appropriately tailored approach
to engaging with them. The Executive
Directors and senior management
report back to the Board on key
issues raised by our stakeholders,
and updates are also provided by the
Research division on the salient trends
in the shipping community that frame
our strategy.
Whilst we do not consider our suppliers
to be a significant stakeholder in our
business, we are committed to treating
our suppliers fairly. In particular, we
recognise the importance of prompt
payment of invoices for our smaller
suppliers. The Board receives regular
updates on supplier payment practices.
Our largest operating subsidiary in the
UK complies with payment practices
reporting, with circa 91% of all invoices
being paid within 60 days and
approaching 75% being paid within
30 days.
Read more:
Our strategy on pages 30 and 31.
Our stakeholders on pages 58 and 59.
Our impact on pages 78 to 101.
The impact of the Company’s
operations on the community
and the environment:
The long-term partnerships that
our brokers form with our clients,
our expertise and depth of experience
in our markets and our broad service
offering (enabled by technology and
data) mean that we are uniquely
placed to drive forward change in the
shipping industry. This is embodied
in our short-form purpose – ‘Enabling
global trade. Leading positive change.’
Our Green Transition offering forms
the framework within which we are
working with stakeholders to move
towards the decarbonisation targets
set by the maritime industry.
With regard to our own operations,
whilst we are cognisant that as a largely
office-based organisation our direct
impact on the environment is modest,
we are committed to monitoring and
minimising our carbon footprint in the
nearer term and achieving net zero
by 2050 in line with current UK
government targets.
Read more:
Our strategy on pages 30 and 31.
Our impact on pages 78 to 101.
TCFD on pages 74 to 77.
The desirability of the Company
maintaining a reputation for high
standards of business conduct:
As a Board we are acutely aware of
our responsibility for setting the tone
from the top, which ensures that we
maintain our reputation for providing
the highest quality of service for our
clients whilst operating at the highest
level of integrity. We achieve this
through the Company’s clear purpose,
which is embedded through our
values and culture. Our governance
framework enables effective
decision-making, supported by
day-to-day policies and procedures
which are communicated to all. Our
delegated authorities matrix supports
the efficient operation of our business
whilst retaining clear accountabilities.
Read more:
Our impact on pages 98 to 101.
Governance framework on pages 108 and 109.
Purpose, values, behaviours and culture
on pages 110 and 111.
Audit and Risk Committee Report
on pages 120 to 127.
The need to act fairly between
the members of the Company:
The Board is conscious of the need
to balance the broad range of
interests and perspectives of our
shareholders in our deliberations,
whilst acknowledging that not every
decision that we make will deliver
everyone’s desired outcome. Board
papers for principal Board decisions
include a section on stakeholder
interests and impacts, which supports
us in considering how our decisions
might affect our shareholders.
Read more:
Stakeholder engagement on pages 58 and 59.
Voting rights on page 146.
61Clarkson PLC
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Financial
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Strategic
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Other
information
Section 172 statement continued
Taking section 172
into consideration
as part of Board
discussion and
decision-making
Decision
The Group’s Clarkson Port Services
business (‘CPS’) acquired DHSS in
February 2023. DHSS is a leading
provider of integrated logistics
services to the offshore renewable
industry, based in the Netherlands.
With a presence across a number of
ports in the Netherlands, DHSS acts
as a gateway to offshore wind farms,
with services spanning the lifecycle
of turbine installation, day-to-day
operation and ongoing maintenance
with sector-specialist coordination
of port logistics, warehousing and
helicopter movements from
strategically located marshalling ports.
How the Board considered section
172 matters in taking its decision
Long-term consequences:
The Board considered whether
the proposal to acquire DHSS was
aligned with the Company’s purpose
and strategy.
We were satisfied that the proposal
would support in particular the
‘Leading positive change’ aspect
of the Company’s purpose, given that
investment in offshore renewable energy
capacity continues to be needed to
support the energy transition.
We also agreed that the proposal
would support our Breadth, Reach
and Growth strategic objectives:
Breadth – increasing the value
of services offered to our customers
by bringing together the spread of
activity of DHSS with that of the
Group in the renewables sector
Reach – expanding the reach of our
CPS business into mainland Europe
Growth – allowing us to capitalise
on the expansion of renewable energy
and presenting enhanced growth
opportunities through the ability to
tender for larger offshore renewables
contracts internationally
We also reviewed whether the proposal
would create long-term financial and
sustainable value for the Group’s
stakeholders and were of the view
that it would.
Employees:
The acquisition would establish the
enlarged business as a sector leader,
providing employees of both the
Group and DHSS with a significant
knowledge base from which to grow.
In addition, DHSS’s employees would
be able to reap the benefits of being
employed by a financially stable,
global, listed Group which would
offer various medium- to long-term
opportunities including training and
role/career development.
Fostering relations with clients:
We were satisfied that the acquisition
of DHSS would provide benefits for
both the Group’s own clients and
those of DHSS. The investment in
complementary activities and
locations would diversify and deepen
our offering to existing and future
clients, whilst the integration of DHSS
within the CPS business would enable
their clients to benefit from the
strength of the Group.
Impact on communities
and environment:
The Group is committed to continuing
to invest in renewables, which we
see as making a crucial contribution
to the energy transition. As a leading
provider of services to the offshore
renewable industry, the acquisition
of DHSS enables us to support that
industry on a global scale.
High standards of business conduct:
The necessary due diligence was
undertaken prior to the transaction
being approved. We were satisfied
that DHSS’s own standards of business
conduct and its culture were aligned
with those of the Group.
Board engagement
The Board approved the acquisition
and the Executive Directors have
provided regular updates on the
integration of the business and
its rebranding as CPS BV.
62 Clarkson PLC
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drives growthAcquisition of DHSS
Read more
Business review on page 50.
63Clarkson PLC
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Risk management
Preserving the integrity
and reputation of the
Clarksons brand through
effective risk management
Our risk profile continues to evolve
as a result of fast-changing market
conditions and regulations, global
macro-economic and geo-political
uncertainty with associated market
volatility, increasing cyber criminality
and climate change. This evolving
external context also brings strategic
opportunities such as the green
transition and technology and
data-driven commercial options which
enable us to lead positive change and
develop the tools to future-proof
our business.
Our risk management framework
ensures that we manage risks against
a risk appetite that seeks to protect
on the downside while promoting
the necessary entrepreneurism to
seize opportunities which further
our strategy to create value for
shareholders and other stakeholders.
Risk environment
Our business model determines
our inherent internal risk:
We act as agents in the provision
of services for and on behalf
of our clients
As agents, we are bound by the
scope and authority determined
by our General Terms and Conditions,
which are communicated to our
clients on commencement of business.
We do not take principal trading
positions, other than in the convertible
bonds business and in exceptional
circumstances in the Financial division
should there be a failure of a client
to meet its obligations during the
settlement period.
We do not own physical assets
of material value
The strength of our balance sheet
comes from cash and other current
working capital which grow with
our consistently profitable business.
Our profit and cash flows are not
exposed to asset valuations or the risk
of loss or damage to physical assets
of material value integral to our
day-to-day business.
Capital commitments
Aside from regulatory capital
commitments in our regulated entities,
we are not required to commit
amounts of capital in the conduct
of our day-to-day business.
64 Clarkson PLC
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Borrowings
The Group has no borrowings.
We experience external risks as we
operate worldwide and are subject
to changing geo-political and market
dynamics, macro-economic factors
and climate change.
Risk culture
Risk management is an integral
part of all of our activities. Risks
are considered in conjunction with
opportunities in all business decisions.
We focus on the principal risks which
could affect our business performance
and therefore the achievement of
our strategic objectives.
Our flat management structure and
culture of open communication across
all areas of the business enables
employees to identify, assess, manage
and report current, potential or
emerging risks to senior management in
a timely manner. Employees are actively
encouraged to suggest improvements
to processes and controls.
Risk appetite
Risk appetite reflects the overall level
of risk we are willing to seek or accept
in order to achieve our strategic
objectives and is therefore at the heart
of our risk management processes.
Determining the nature and extent
of the risks we are willing to take is the
responsibility of the Board. Our aim is
to manage each of our principal risks
and mitigate them to within their
agreed individual risk appetite levels.
The Board approves the Group’s
policies, procedures and controls.
This process enables, where possible,
a reduction in risks to the tolerance
levels set by the Board. In determining
its risk appetite, the Board recognises
that a prudent and robust approach
to risk mitigation must be carefully
balanced with a degree of flexibility
so that appropriate levels of risk are
accepted in line with our strategy and
the entrepreneurial spirit which has
greatly contributed to the success
of the Group is not inhibited.
Control environment
Our internal control system is
embedded into our culture and
encompasses the policies, processes
and behaviours that, taken together:
– facilitate its effective and efficient
operation by enabling us to respond
appropriately to significant risks
that prevent us from achieving
our objectives. This includes the
safeguarding of assets from
inappropriate use or from loss
or fraud and ensuring that liabilities
are identified and managed;
– ensure the appropriate quality
of internal and external reporting.
This requires the maintenance of
proper records and processes that
generate a flow of timely, relevant
and reliable information that enables
management to make appropriate
strategic and operational
decisions; and
– ensure compliance with applicable
laws and regulations.
Our internal control system is
designed to evaluate and manage,
rather than totally eliminate, risk and
can only provide reasonable, and not
absolute, assurance against material
loss or misstatement.
The Group continually seeks
to improve and update existing
procedures to introduce new controls
where necessary and to evaluate
emerging risks.
It is clearly communicated to all staff
that they are responsible for ensuring
compliance with Group policies,
identifying risks within their business
and ensuring these risks are controlled
and monitored in the appropriate way.
Annual mandatory training reinforces
this approach.
Read more
Our strategy on pages 30 and 31.
Our markets on pages 24 to 29.
Principal risks on pages 68 to 71.
Audit and Risk Committee Report
on pages 120 to 127.
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Risk management continued
The Board is responsible for:
– Managing risk to protect operations and deliver strategic opportunities;
– Setting the Group’s strategic objectives and determining the nature and
extent of the risks it is willing to take (the risk appetite) in achieving these
strategic objectives;
– Establishing risk management policies, key controls and procedures to ensure
that they continue to be effective and protect the Group’s stakeholders; and
– Maintaining the Group’s system of internal controls and risk management
and reviewing the effectiveness of these systems annually.
The Audit and Risk Committee is responsible for:
– Undertaking an annual review of the Group’s internal controls
and procedures;
– Reviewing the adequacy and effectiveness of the Group’s risk management
systems and processes;
– Overseeing the development of internal control procedures which provide
assurance that the controls which are operating in the Group are effective
and sufficient to counteract the risks to which the Group is exposed;
– Reviewing the External Auditor’s report in relation to internal control
observations; and
– Considering all internal audit reports, and overseeing implementation
of associated recommendations.
Operational management is responsible for:
– Embedding risk management processes and internal controls across divisions
and functional areas;
– Ensuring effective risk identification, assessment and mitigation is performed
across the business; and
– Ensuring risk awareness and safety culture is embedded across the business.
Bottom up
Assessment at
operational
level
Top down
Risk oversight
and assessment
Risk governance
66 Clarkson PLC
2023 Annual Report
Approach and framework
Our approach is to maintain and strengthen our risk management and internal
control framework by identifying, assessing, controlling, evaluating, monitoring
and reporting the risks facing our business.
Our risk assessment is formed in stages:
1
Identify current and emerging risks facing the Group, including
an appraisal of the extent the risk is affected by climate change;
2
Document risks on a centrally managed risk register;
3
Identify the level of appetite appropriate for each risk;
4
Assess the likelihood of occurrence of each risk over a 36-month period;
5
Evaluate the potential impact of each risk on the Group using
a quantified scale;
6
Determine the strength and adequacy of the controls operating
over each risk;
7
Identify and assess the effect of any mitigating factors on both
the likelihood and impact;
8
Compare the residual risk against the identified risk appetite;
9
For each principal risk, after considering the relevant risk appetite
and mitigants, identify the extent to which any risk exceeds appetite;
10
Identify the plan of action for the next 12 months to deliver enhanced
controls and, where necessary, bring the risk within appetite;
11
Consider the level of additional assurance derived from the Three Lines
of Defence model, including internal audit; and
12
Monitor and report all risks, any emerging risks, any changes to the level
of risk appetite and the status of the plan of action on a regular basis.
The Board recognises that it has limited
control over many of the external risks
it faces, including, the macro-economic
and geo-political environment and
climate change. It nevertheless
reviews the potential impact of such
risks on the business and actively
considers them in its decision-making.
The Board monitors the principal risks
at each Board meeting.
Every year, through the integration
of culture, compliance and training,
we make further progress in embedding
our risk management approach with
all employees. Using the risk
management system we introduced
in 2022, we continue to improve risk
awareness, refine key controls and
enhance procedures to further
mitigate risks.
The Board and senior management
take a forward-looking approach to risk
to ensure early identification, timely
assessment and, where necessary,
mitigation of new and emerging
risks, such that they can be evaluated
alongside known and continuing risks.
Priority for 2024
In addition to our regular risk
management activities, we continue to
promote an environment of identifying,
assessing, controlling, evaluating,
monitoring and reporting the
effectiveness of our existing controls
in light of emerging and evolving
macro-economic, geo-political,
cyber and technological challenges
and opportunities to enable the Board
to execute its responsibilities. Our risk
management system will continue
to monitor the effectiveness of key
controls and enable rapid remedial
action where necessary. This is
supported by enhanced management
information from across the Group
including our Research division.
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Principal risks
The backdrop to 2023 has been one
of continued geo-political instability,
although the macro-economic
position has been more settled than
in 2022. Against this wider context,
the Board determined that no
changes were necessary to either
the principal risks or their risk factors
(following increases to the risk factors
of some risks in the prior year).
The risks that follow, whilst not
exhaustive, are those principal risks
which we believe could have the
greatest impact on our business
and have been discussed at meetings
of the Board and the Audit and Risk
Committee. The Board reviews these
risks in the knowledge that currently
unknown, non-existent, emerging
or immaterial risks could turn out
to be significant in the future and
confirms that a robust assessment
has been performed.
Whilst not a principal risk for
the Group at this time, we consider
climate change to be a thematic risk
which potentially impacts a number
of our principal risks. The Audit and
Risk Committee recognises that the
assessment of the opportunities and
the impact on principal risks arising
from climate change requires
consideration of much longer
timescales beyond the 36 months
used in the viability analysis on
page 73, and will continue to take
a long-term view of the potential
impacts and mitigants for the Group.
In leading positive change in a
fast-changing world, we continue
to assess and manage areas where
climate change can impact our
business and clients, and seek ways in
which we can proactively support our
clients through the green transition.
Macro-economic and
geo-political factors
Change in risk factor since 2022
No change
Link to strategic objective
Understanding, Growth
Description
The strength of, and changes in,
world trade, global GDP and other
general economic fluctuations impact
the demand for ships. The actions
of owners and financiers have a
direct impact on the supply side
of our business.
Supply/demand imbalances cause
fluctuations in freight rates. If freight
rates, volumes or asset prices fall,
the commission that we receive
on any deal would also fall.
World seaborne trade in 2022
declined, albeit by only 0.4%. 2023
witnessed renewed growth, which
is forecast to continue into 2024.
However there remain considerable
uncertainties in the geo-political
landscape, including as a
consequence of the Russia-Ukraine
conflict, tensions across the Middle
East and weaker growth in China.
Controls/mitigating factors
– We are not dependent on any one
country’s economy as our operations
and clients are located in all major
maritime and trade centres globally.
– Our business model is built on the
ability to deal with downturns and
remain profitable. Our employee
remuneration, which is weighted
toward profit-related variable
compensation, means that
overheads are responsive to swings
in asset values and freight rates.
– We have the resources and
capability available to open offices
in new locations, mitigating the
reliance on regional performance.
– Our broad product offering, led
by experts in their fields, means
we are in the best position to find
new opportunities in volatile market
conditions and able to take
advantage of market turnarounds.
– We review the performance of
each office and product line
at least monthly.
Activities in 2023
Our results for 2023 show the
robustness of our strategy and
business model against volatility
in our markets.
Read more:
Our markets on pages 24 to 29.
Risk management continued
68 Clarkson PLC
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Adverse movements
in foreign exchange
Change in risk factor since 2022
No change
Link to strategic objective
Understanding, Breadth, Reach,
Trust, Growth
Description
There is a risk that we do not take
advantage of, or are overtaken by,
changes in our industry.
Clients are becoming increasingly
sophisticated and looking to
technology to provide efficiencies,
access to more intelligence for
informed decision-making, as well
as data to meet their reporting
requirements. Consideration of
environmental factors is also coming
to the forefront of clients’ strategy.
These changing requirements in
the broking industry create business
opportunities for the Group as a
trusted advisor to our clients. Failure
to consider these changes, both at a
strategic and operational level, could
lead to a loss of market share, loss
of revenue and reputational damage.
Controls/mitigating factors
– We monitor and develop
technological applications which
will impact the broking industry
and ensure we remain best-in-class.
– We monitor competitors’ activities
in terms of product offerings to
ensure we can react accordingly.
– We maintain strong client
relationships and continuously
review and improve based on
our clients’ broking requirements.
– The Sea suite of sophisticated
technological tools enhances our
service offering to our clients and
helps to future-proof our business.
– Our market research and analysis
gives our brokers insights into the
near- and future-term shipping
climate, placing them in a
knowledgeable position to best
support our clients to make
smart decisions.
Change in risk factor since 2022
No change
Link to strategic objective
Growth
Description
The Group can be exposed to adverse
movements in foreign exchange as our
revenue is mainly denominated in US
dollars and the majority of expenses
are denominated in local currencies,
whilst we continue to report in sterling.
The average exchange rate in 2023 of
US$1.25/£1 was similar to that in 2022
when the average was US$1.23/£1.
There is a risk of a weakening in the
US dollar.
Controls/mitigating factors
– The Group hedges currency
exposure through forward sales
of US dollar revenues.
– We also sell US dollars on the spot
market to meet local currency
expenditure requirements.
– We continually assess rates of
exchange, non-sterling balances
and asset exposures by currency.
Activities in 2023
We continued to apply our hedging
strategy consistently and, as at
31 December 2023, the Group had
hedges in place for 2024, 2025 and
2026 of US$111m, US$75m and
US$15m respectively.
Read more:
Our financial risk management objectives
and policies in note 28 on pages 194 to 196.
Activities in 2023
– We continued our strategy to
be at the forefront of the digital
transformation of our industry by
investing in the Sea suite of tools to
ensure that we anticipate and meet
the evolving needs of our clients.
– We continued to invest in internal
tools for trade to provide our
brokers with the best technology
to service our clients.
– We further grew our in-house
specialist Green Transition team to
complement our brokers’ offering,
helping clients understand, plan
for and comply with the changing
environmental requirements.
– We actively worked to take
advantage of the opportunities
which arose across all verticals from
the green transition, as a result of
the IMO target set for 2030. This
will position the Group to play a
strong role in these fast-changing
markets over the longer term.
– We expanded our research to both
meet clients’ needs and to ensure
the best market intelligence for
our Broking teams.
Read more:
Business review on pages 32 to 57.
Changes in the broking industry
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Risk management continued
Principal risks continued
Financial loss arising from
failure of a client to meet
its obligations
Cyber risk and
data security
Breaches in rules
and regulations
Change in risk factor since 2022
No change
Link to strategic objective
Understanding, Growth
Description
Uncertainty in our markets continues
to affect the amount of debt that may
be recoverable. Furthermore, any
forward order book values may have
to be written off, thereby impacting
future income as well as existing
booked income.
Controls/mitigating factors
– We maintain good relationships
and communication with our clients.
– We regularly monitor global client
debt levels using information from
a range of sources.
– Provisions are based on ageing
of balances, disputes or doubts
over recoverability.
Activities in 2023
– We continued to provide for doubtful
debts on a conservative basis.
– There were no unexpected losses
arising from a client failure in 2023.
– We monitored cash collections daily.
Read more:
Our trade receivables in note 15 on pages 183
and 184.
Change in risk factor since 2022
No change
Link to strategic objective
Trust
Description
Financial loss, reputational damage
or operational disruption resulting
from a major breach in the
confidentiality, integrity or availability
of our IT systems and data.
A breach could be caused by an
insider, an external party, inadequate
physical security, insecure software
development, or inadequate supply
chain management.
The market has seen an increased
volume of spam, targeted phishing
type emails and ransomware attacks.
The increased frequency of zero-day
attacks and the increasingly
sophisticated methods of social
engineering attempts are further
examples of the risks we face.
Controls/mitigating factors
– IT processes include regular
penetration testing, anti-virus
and firewall technologies, monthly
network vulnerability scans,
frequent password changes
including complexity requirements,
enforced multi-factor
authentication requirements, email
scanning and strict procedures
on granting and removing access.
– Operational processes include
24/7 cyber threat monitoring, strict
segregation of duties, business
continuity planning and regular
cyber awareness training.
Activities in 2023
– We continued to invest
significantly in enhanced security
policies and measures, people,
resources and training dedicated
to the prevention of cyber crime,
both in an office and remote
working environment.
– Employee awareness
communications, enhanced
access control technologies and
additional security monitoring
were implemented to combat
the increased threat.
Change in risk factor since 2022
No change
Link to strategic objective
Trust
Description
Breaches of regulations, intentional or
unintentional, could have a significant
financial and reputational impact on
the Group. In regulated entities, this
could result in the loss of licences
required to operate.
Regulations that could be breached
include laws governing sanctions,
bribery and corruption, market abuse
(including insider dealing and market
manipulation), money laundering,
facilitation of tax evasion, data
privacy, and health and safety.
Controls/mitigating factors
– Investment in compliance, KYC
and legal functions.
– Policies and procedures
for all areas.
– Regular training including
mandatory annual training
in all areas.
– Due diligence performed on clients,
vessels and transactions.
– Various internal controls to identify,
block, escalate and record activity
that may be prohibited.
– Regular monitoring and audits
of relevant internal controls.
Activities in 2023
– Updated global risk assessments
across various areas.
– Increased and upgraded resources
in KYC, sanctions and compliance
support.
– Reviewed and amended various
policies, created additional policies
and procedures, introduced various
additional internal controls and
upgraded functionality of various
internal controls.
– Created additional training.
Read more:
Leading a responsible business
on pages 98 to 100.
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Loss of key personnel
– normal course of business
Loss of key personnel
– Board members
Change in risk factor since 2022
No change
Link to strategic objective
People
Description
Losing key personnel may impair
our coverage of a particular line
of business as our success depends
on the experience, reputation and
performance of our specialist teams
across the Group.
The continued relative strength of
shipping markets has improved the
financial position of competitors and
thus their ability to poach our staff
through enticing financial packages.
Controls/mitigating factors
– We offer competitive remuneration,
a wide range of progressive
employee benefits and an excellent
working environment.
– Employment contracts include
restrictive covenants, appropriate
notice periods and gardening leave
provisions to prevent the loss of
key information.
– The Group seeks to create a working
culture that is inclusive for all,
thereby maintaining high standards
and good employee relations.
– Group and divisional organisational
and management structures ensure
clarity of strategic direction and goals
and allow us to expose employees
to maximum opportunity.
– Global mobility is encouraged
and supported wherever possible.
– We invest in our teams through
training and development, and
promote further learning through
lectures and encouraging
personal study.
– Bi-annual promotions process,
succession planning and
documentation of key procedures
help minimise any impact of
losing personnel.
– Cross-divisional and business
collaboration is actively encouraged
across the Group.
Activities in 2023
– Continued focus on strategic hires.
– Promotion of new Managing
Directors, Directors and Divisional
Directors to expand the cohort
of future leaders.
– Further embedding of our
competency and behaviours
framework to support leadership
and employee development,
performance management and
promotions based on consistent
criteria of performance
requirements.
– Launched the Clarksons Academy,
a central hub where employees can
access valuable learning resources
for their continued personal and
professional development, each
programme specially curated to
equip employees with the skills
and resources they need while
also providing valuable context
on global shipping and Clarksons’
role as an industry leader.
– Continued to roll out our bespoke
management and leadership
development programme.
– Launched the Trainee Broker
programme providing trainee brokers
with a breadth of experience to help
accelerate career development and
developing the next generation of
brokers who can deliver the full
value of the Group to clients.
– Strengthened our employee
engagement initiatives through
further channels to listen to
employees and extended the
Employee Voice Forum to global
locations supported by our
dedicated Employee Engagement
Director, Heike Truol.
– Analysis of turnover and absenteeism
and exit interview data to actively
address anything of concern.
– Significant employee transfers across
global locations within the Group.
Read more:
Our people on pages 84 to 89.
Employee engagement on page 112.
Change in risk factor since 2022
No change
Link to strategic objective
People
Description
At the Annual General Meeting
in May 2024, the Company will seek
approval of its Directors’ Remuneration
Report (‘DRR’). There is a risk that
shareholders will not appreciate the
context of the existing contractual
arrangements of the Executive
Directors (as reflected in the
shareholder-approved Directors’
Remuneration Policy). This could
result in shareholders voting against
the binding resolutions to re-elect
individual Non-Executive Directors.
Controls/mitigating factors
We explain the work that has been
undertaken to mitigate this risk in
the DRR.
Activities in 2023
Continuing engagement with
major shareholders to ensure an
understanding of the context of
the Directors’ Remuneration Policy
and its alignment and continuing
importance to the success of
the Group’s strategy.
Read more:
Directors’ Remuneration Report
on pages 128 to 144.
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Viability statement
Provision 31 of the 2018 UK Corporate
Governance Code requires the
Directors to make a statement in the
Annual Report regarding the viability
of the Group.
In carrying out their robust assessment,
the Directors have considered the
resilience of the Group with reference to:
– the risk appetite set by the Board;
– the Group’s principal risks and their
impact on its strategic objectives;
– the effectiveness of mitigating actions;
– the business model;
– future projected operational
performance;
– financial performance, solvency
and liquidity over the assessment
period; and
– the robustness of the operating
model and longer-term strategy.
The Board conducted this review for
the three-year period to 31 December
2026, which is appropriate for the
following reasons:
– in Broking, over 70% of the forward
order book is due to be invoiced
within the next three years;
– historical average newbuilding
process from inception to delivery
is two to three years;
– existing hedging activities extend
to 2026;
– pension scheme funding is subject
to triennial valuations; and
– external investment analysts provide
estimates and forecasts for three
years of market expectations for
revenue and profit before taxation.
The Board has identified the principal
risks that could impact the Group. See
pages 68 to 71 for more information
on these risks, together with mitigating
factors and controls. The Board does
not consider that any single event
detailed on the next page would give
rise to a viability event for the Group.
Failure to monitor and take the
appropriate mitigating action could
result in a combination of smaller
events or circumstances accumulating
to create conditions in which the
longer-term viability is brought into
question. The compounding of events
will only occur if no action is taken
to mitigate each of the smaller events
which arise; therefore the probability
of such a compound viability event
is considered to be low.
The Group has considerable financial
resources available to it: a strong
balance sheet and it has consistently
generated an underlying profit and
good cash inflow. As a result of this,
the Directors believe that the
Group is well placed to manage its
business risks successfully, despite
the challenging market backdrop
and geo-political tensions.
Management has stress tested a
range of scenarios, modelling different
assumptions with respect to the Group’s
cash resources. Three different
scenarios were considered:
– Management modelled the impact
of a reduction in profitability to
£30m (a level of profit the Group
has exceeded in every year since
2013), whilst taking no mitigating
actions: the Group remained
cash-generative before dividends.
– Management assessed the impact
of a significant reduction in world
seaborne trade similar to that
experienced in the global financial
crisis in 2008, the COVID-19
pandemic in 2020 and the
Russia-Ukraine conflict in 2022:
seaborne trade recovered in 2009,
2021 and 2023 along with the
profitability of the Group. Since 1990,
no two consecutive years have seen
reductions in world seaborne trade.
– Management undertook a reverse
stress test over a period of three
years to determine what it might
take for the Group to encounter
financial difficulties. This test was
based on current levels of overheads,
the net cash and available funds
1
position at 31 December 2023, the
collection of debts and the invoicing
and collection of the forward order
book. This test determined that, in
the absence of any mitigating action
which would be applied in these
circumstances, less than 30% of
current levels of new business would
be required to remain cash positive
over a three-year period.
Under the first two scenarios, the
Group is able to generate profits and
cash, and has positive net cash and
available funds
1
. In the third scenario,
expected levels of new business and/
or mitigating action by management
make it implausible that such an event
could occur.
Given the net cash and available
funds
1
of the Group and the forward
order book for all future years, the
probability of a compound series
of events collectively resulting in the
Group becoming unviable is low.
Based on their assessment of the
prospects and viability of the Group
and the outcome of the sensitivity
analyses, the Directors confirm that
they have a reasonable expectation
that the Group will be able to continue
in operation and meet its liabilities
as they fall due over the three-year
period ending 31 December 2026.
In doing so, it is recognised that such
future assessments are subject to a
level of uncertainty that increases with
time and, therefore, future outcomes
cannot be guaranteed or predicted
with certainty.
The Group’s viability and going
concern status is reviewed regularly
by the Audit and Risk Committee.
The viability assessment is reviewed
annually by the Board.
Risk management continued
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Viability analysis
The analysis below seeks to identify viability events which are considered
so material and which, if they arose and were not promptly mitigated, could
be sufficiently material as to bring into question the viability of the Group.
Risk Analysis
Macro-economic and
geo-political factors
Our markets are multi-cyclical and volatile.
Our industry has not seen a two-year period of
volume decline since 1990. The Group is consistently
profitable, assisted by the forward order book.
Sustained declines in world trade rarely occur
overnight, so the business will be able to respond
with appropriate measures, as occurred during the
COVID-19 pandemic in 2020 and the Russia-Ukraine
conflict in 2022.
Changes in the
broking industry
Broking contributes a considerable proportion to
the Group’s results. We closely monitor technological
changes which will impact the industry and are
developing our own applications based on our views
of clients’ broking requirements.
Adverse movements
in foreign exchange
The majority of the Group’s revenues is in US dollars.
Over the last three years, the USD/GBP rate has
reached lows of 1.04 and highs of 1.42. The Group has
hedges in place for 2024, 2025 and 2026, reducing
the effect of any changes in the exchange rate.
Financial loss arising
from failure of a client
to meet its obligations
The Group benefits from having thousands of clients
spread around the world in a wide range of sectors.
The largest client balance, other than amounts
arising on a settlement across the year end, accounts
for 4.5% of the total outstanding trade receivables
balance at 31 December 2023.
Cyber risk and
data security
We utilise state-of-the-art internal processes and
training to prevent any cyber attack breaching our
defences. A successful attack could occur without
warning and could affect the Group’s ability to
conduct business for a period of time. Emails can be
quickly rerouted or run on other unaffected parts of
our network. In the event of an attack which causes
the loss of the network, it is possible to reconstruct
it using backups. Assuming suitable hardware is
available, key services can be restored within hours
and all other services within days. Whilst this might
result in errors, omissions and possible claims, key
business decisions can still be taken using other
forms of communication.
Breaches in rules
and regulations
The Group has extensive and adequate tools and
procedures to ensure compliance with rules and
regulations. The Group continues to develop and
invest in these tools to improve further the
effectiveness of these procedures. It has a highly
experienced, expert Compliance and Legal team.
Loss of key personnel
– normal course
of business
No one global divisional team accounted for more
than 22% of revenue or 36% of underlying profit
before taxation
1
in 2023. No individual generated
more than 4% of new business for the Group in
2023 or 2022.
Loss of key personnel
– Board members
The loss of one or more Non-Executive Director will
not have a direct impact on the trading performance
or financial position of the Group.
1 Classed as an APM. See pages 219 and 220 for more information.
Going concern
The Group’s business activities,
strategic objectives, business
performance and financial position,
together with the factors likely to affect
its future development, are set out in
the Strategic Report on pages 10 to 101.
A full explanation of the assessment
undertaken by management and
considered by the Directors is set out
in the viability statement on page 72.
The Group has considerable financial
resources available to it, a strong
balance sheet and has consistently
generated an underlying profit and
good cash inflow. There are no material
uncertainties related to events or
conditions that cast doubt on the
Group’s ability to continue as a going
concern. Accordingly, the Directors
have a reasonable expectation that
the Group has sufficient resources
to continue in operation for at least
the next 12 months. For this reason,
they continue to adopt the going
concern basis in preparing the
financial statements.
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The Company has reported consistent
with the TCFD recommendations
during the year ended 31 December
2023, with the exception of the
recommendation under the Metrics
and Targets pillar, where we have
provided an explanation.
Our approach to the governance
and risk management pillars of TCFD
is integrated into our wider processes,
and our reporting in relation to these
areas is therefore set out within
the relevant sections of the
Annual Report.
Governance
Describe the board’s oversight of
climate-related risks and opportunities
The Board has overall responsibility
and accountability for all risks and
opportunities, including all
climate-related matters. The Audit and
Risk Committee monitors the impact
of climate change on our principal risks,
including their materiality, as part of
their ongoing monitoring of actual
and emerging business risks.
Read more:
Our governance framework
on pages 108 and 109.
Describe management’s role
in assessing and managing
climate-related risks
and opportunities
Our CFO & COO takes overall
executive responsibility for ESG
matters (including climate change).
Our CEO and the Executive Team lead
the identification of climate-related
opportunities as part of their
responsibility for delivering the
strategy, and identify and manage
climate-related risks within their
relevant areas.
Read more:
Risk governance on pages 66 and 67.
Our governance framework
on pages 108 and 109.
Task Force on Climate-Related
Financial Disclosures (‘TCFD’)
Risk management continued
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Strategy
Describe the climate-related risks
and opportunities the organisation
has identified over the short, medium,
and long term, and their impact on
the organisation’s business, strategy,
and financial planning
The risks and opportunities for
our business are identified through
existing business planning and risk
management processes. In 2023, we
revisited previously identified risks and
opportunities and were satisfied that
there were no new emerging risks to
be considered. Further detail on the
review undertaken and the risks and
opportunities identified through the
review are set out on the next page.
Read more:
Climate scenario analysis on pages 76 and 77.
Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or
lower scenario
In 2021, we undertook climate scenario
analysis to understand how the
climate-related risks and opportunities
that we face may manifest themselves
under two different temperature
pathways (including one aligned to
the Paris Agreement). We are satisfied
that this remains relevant.
Read more:
Climate scenario analysis on pages 76 and 77.
Risk Management
Describe the organisation’s
processes for identifying, assessing
and managing climate-related risks
and how those processes are
integrated into the organisation’s
overall risk management
Our processes for identifying,
assessing and managing the impact
of climate change on our principal
risks are integrated into our existing
risk management processes.
Read more:
Our risk management framework
on pages 66 and 67.
Metrics and Targets
Disclose the metrics used
by the organisation to assess
climate-related risks and opportunities
in line with its strategy and risk
management process
The metrics used by the Board
to assess our climate-related
opportunities are set out on pages 80
and 81. The principal climate-related
risk that we have identified relates
to stakeholder environmental
expectations, which the Board assesses
through stakeholder feedback.
Read more:
Our impact on pages 80 and 81.
Disclose Scope 1, Scope 2, and,
if appropriate, Scope 3 greenhouse
gas emissions, and the related risks
Our Scope 1, 2 and limited Scope 3
emissions are disclosed on page 83.
Following work undertaken in 2022
to start collating wider Scope 3 data,
a revised approach is now being taken.
This is focused initially on assessing all
Scope 3 categories in relation to our
largest broking subsidiary, rather than
focusing on the Scope 3 categories
that we had selected and measuring
them in our largest locations.
This revised approach ensures
that assumptions will not be made
regarding which Scope 3 categories
are most relevant to the Group. Work
will be required in this area to satisfy
the Audit and Risk Committee of the
robustness of the Scope 3 data before
it is disclosed. We will provide a further
update in the 2024 Annual Report.
Read more:
Our environmental performance
on pages 82 and 83.
Describe the targets used
by the organisation to manage
climate-related risks and opportunities
and performance against targets
We have confirmed our commitment
to achieving net zero by 2050 in line
with current UK government targets.
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Recognising the importance of
mitigating climate change, our
investors, clients and employees
(and in particular our future ‘Gen Z’
employees) are increasingly aware of
the environmental credentials of their
investee companies, suppliers and
employer respectively. As a result,
investors will expect companies
to proactively align operations with
external environmental frameworks
through emission cuts and/or
offsetting. We expect this to
materialise in the short term, and
certainly within the next five years.
Stakeholder environmental
expectations will continue to develop
and grow in the medium and long
term as more transparency is
required across the value chain.
Mitigation: We are committed
to proactively engaging with our
investors and clients to understand
their environmental expectations.
We will collaborate with our key
stakeholders to help them achieve
the shared objective of reducing
their impact on the environment.
Our purpose statement and the
launch of our Green Transition
offering demonstrate to our
stakeholders our commitment
to be part of the solution through
leading and facilitating positive
change in the shipping industry.
Furthermore, we understand
that transparency surrounding our
position in the climate crisis is crucial.
We disclose our GHG emissions
annually and are aligning our reporting
to the recommendations of TCFD.
As a business we are committed
to supporting our stakeholders by
providing the information necessary
to contribute to the level of
transparency required.
To meet both global and
national climate targets, including
the procurement of clean energy,
renewables are expected to become
an increasingly vital part of the energy
mix. Due to higher and more
consistent wind speeds, offshore wind
farms can create more electricity than
their onshore counterparts, whilst
minimising noise and visual pollution
and land use competition. Offshore
wind energy therefore has the
potential to significantly contribute to
the decarbonisation of the energy mix.
As important players in the financing,
brokering and provision of research
and port services for specialist vessels,
this growing offshore wind energy
market presents us with a significant
opportunity. Although renewable
energy sources are already starting
to increase, we expect this to grow
further in the medium term, within
the next 10 years.
There is significant growth in offshore
wind energy capacity and associated
farms and turbines in both the
Rapid Decarbonisation and Gradual
Transition scenarios, with greater
growth in the Rapid Decarbonisation
case. However, the world continues to
heavily rely on non-renewable energy
sources, even though renewable
sources have seen an uptick in recent
years. The infrastructure for facilities
such as offshore wind is still being
developed and is unlikely to overtake
consumption of fossil fuels in the
short term (less than five years).
Harnessing this opportunity:
We need to be the way-finder for
the industry, best able to provide
research, advice, strategic guidance,
and broking and financial execution
services to support the development
of offshore wind energy projects.
Our renewables team was established
around 20 years ago for this very
purpose and has enabled us to hold
a market leadership position in
offshore wind energy intelligence.
We will continue to adapt our policies,
strategy and targets to maintain this
position, and we will grow and pivot
capacity towards offshore renewables
brokerage, port services, banking
and research.
Risk management continued
TCFD continued
Opportunity
Offshore wind energy
Timeframe: Medium term (5-10 years)
Risk
Stakeholder environmental
expectations
Timeframe: Short term (0-5 years)
Evaluating climate risks
and opportunities
The risks and opportunities relating
to climate change for our business are
identified through existing business
planning and risk management
processes, In 2021 we conducted
a thorough analysis of transition
and physical risks and opportunities
that could affect the shipping
industry. As a result, one risk and two
opportunities were assessed in terms
of likelihood and impact, in line with
our risk management framework,
from a long-term perspective, in
accordance with internally developed
maritime-specific climate scenarios:
– The Gradual Transition scenario
tracks to a moderate overshoot of
the Paris Agreement 2°C temperature
increase by 2100. In this scenario,
CO
2
emissions peak in the late
2020s and then gradually decline
through a gradual shift away from
fossil fuel use and robust growth
in solar, wind and other renewable
energy sources, alongside some
developments in carbon capture.
– The Rapid Decarbonisation
scenario is compatible with
the goals of the Paris Agreement,
and requires steep global annual
emissions reductions, sustained
for decades, to stay within a 1.5°C
to 2°C temperature increase. This
scenario is characterised by a rapid
decline in fossil fuel use, albeit with
gas playing a role as a transition
fuel, and an exponential growth
of renewable energy production,
developments in carbon capture
and land use changes.
In 2023 we revisited the risks and
opportunities relating to climate
change for our business, and were
satisfied that there were no new
emerging risks which needed to
be factored into our assessment.
Focusing therefore on the one risk
and two opportunities identified
in 2021, we were satisfied that the
climate scenario analysis conducted
in 2021 remains relevant and that there
have not been any new developments
that need to be factored in to this
analysis. The potential impact of
these risks and opportunities if they
were to occur is outlined here, along
with our resilience to these risks and
opportunities. However, these are
not considered to be material to
the Group at this time.
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Trends in offshore wind energy
forecasting do not show a uniform
distribution around the world; certain
areas are likely to grow more strongly,
in part due to their geographical
configuration. As such, identifying
these at an early stage is crucial for
us to consequently build our capacity
in the relevant geographical areas.
Offshore wind energy is a nascent
industry for many areas of the world.
Our broking and advisory teams
are equipped to support these areas
in procuring shipping vessels and
infrastructure from more established
markets, whilst concurrently
supporting them in building a strong
supply chain locally for future projects.
Moreover, and increasingly after 2030,
a share of global annual investment
will be required to replace existing or
retired capacities with more advanced
technologies. Our renewables team
will play a crucial role in developing
the intelligence required to best
support clients in the replacement
and retirement of offshore wind
energy capacities.
As we evidence our expertise in these
areas, we can gain a competitive
advantage over those who do not
align to a low-carbon future, ensuring
we do not lose market share to new
entrants to the market. Through the
actions outlined above, we believe
that we are in a strong position to
capture a significant share of this
growing market.
Despite the present dominance
of oil-powered ships, international
commerce and climate change pacts
and policies are already starting to
impact on the current world fleet and
newbuilding orderbook. Lowering the
carbon emissions associated with the
shipping industry will require new
ships to be built, compatible with
clean fuels. As the green transition
evolves, older assets will need replacing
and chartering strategies will evolve.
Further, port and infrastructure
investment will be required to
accommodate renewed fleet
standards. We expect this opportunity
to materialise in the medium term,
within the next 10 years.
Similar to the offshore wind energy
opportunity, whilst the newbuilding
fleet renewal opportunity is already
providing opportunities for our
business, there is potential for this
opportunity to grow significantly
in both the Gradual Transition and
Rapid Decarbonisation scenarios.
As policies and regulations in
international maritime are still being
developed, technology is still evolving,
and the vast majority of the existing
fleet is powered by conventional fuel,
it is unlikely that in the next five years
(a short-term horizon) demand for
oil-powered ships will become obsolete.
Harnessing this opportunity:
To support this growing area of
the business, we have invested in our
market-leading teams which provide
research, ship renewal expertise,
advisory services and the execution
and financing of alternate-fuelled
newbuilding of vessels. We are
focusing efforts on building expertise
within newbuilding, sale and purchase,
and our chartering brokerage. We
remain a major tonnage provider
to the key global shipbuilding players.
As intermediaries, we are well informed
on both demand- and supply-driven
expectations, concerns and strategies.
Our aim is to assist and support both
shipowners and commodity interests
towards the transition to a low-carbon
economy. As the industry is becoming
more complex, our unique level of
understanding of the market and
regulatory landscape is ever-more
important to help clients navigate this
fast-changing environment. We remain
well placed to capitalise on this next
phase of shipbuilding fleet renewal.
We are committed to closely
monitoring the development of latest
trends, regulations and technologies
which will affect the need for fleet
renewal. Environmental regulations
are not rolled out uniformly around the
world. We will leverage our position as a
global company to use our experience
in areas where environmental
regulations are most stringent to best
prepare for the transition in other areas.
This opportunity is likely to be most
significant in a scenario where the world
undergoes an extensive transformation
to a low-carbon economy by 2030.
Opportunity
Offshore wind energy
Timeframe: Medium term (5-10 years)
Opportunity
Newbuilding fleet renewal
Timeframe: Medium term (5-10 years)
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Our impact
Building a more
sustainable future
through our focus
on ESG
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Our purpose as a Company is to ‘enable
smarter, cleaner global trade’ and to
‘lead positive change’, and we are
committed to supporting our clients
to achieve their decarbonisation goals.
Every business must play its part in
achieving a more sustainable future.
Whilst we strive at all times to reduce
our environmental footprint and
remain dedicated to achieving net
zero by 2050, we strongly believe that
the single most material impact we
can have is through our sector-leading
work in the green transition. The
shipping industry currently accounts
for 2.2% of global CO
2
emissions, and
we play a pivotal role in the reduction
of emissions across the maritime sector.
This year we increased our focus
across all areas of sustainability.
We conducted our first ESG
materiality assessment to identify
priorities and areas where Clarksons
can have the most significant impact.
The assessment included interviews
and workshops with employees and
a materiality survey with key internal
stakeholders to prioritise material
issues. The process reaffirmed our
strategic focus; the green transition
was identified as the key priority
across all considerations. We also
identified other environmental, social
and governance areas of focus that
we plan to invest in further.
Our people are the driving force of
our Company, and we are committed
to a diverse and inclusive workplace
where we prioritise their health,
wellbeing and development.
Supporting society as a whole is central
to our values, and we will continue to
achieve impact through The Clarkson
Foundation and our Corporate Social
Responsibility programme.
Clarksons’ ESG pillars and goals
Environment
Managing our
environmental impact
Social
Focusing on our people
and our communities
Governance
Maintaining robust
governance practices
Planet
Drive the green transition in shipping
Support the reduction of carbon
emissions across the maritime
industry through research, innovation
and expertise.
Reduce our environmental footprint
Take action to achieve net zero
by 2050 and reduce our resource
consumption.
People
Support our people to thrive
Build a diverse and inclusive
workplace where we prioritise the
health, wellbeing and development
of our employees.
Deliver impact in our communities
Support charities and communities
to deliver impact.
Principles
Lead a responsible business
Operate with high standards
and integrity. Maintain trust with
our stakeholders and deliver
sustainable value.
Link to UN Sustainable
Development Goals
Link to UN Sustainable
Development Goals
Link to UN Sustainable
Development Goals
Read more:
On pages 80 to 83.
Read more:
On pages 84 to 97.
Read more:
On pages 99 to 100.
Our governance structures are
integral to the long-term success of
our business; we have robust systems
and policies in place to maintain trust
and deliver value to our stakeholders.
ESG Framework
Using the results of the materiality
assessment, we have developed a
framework (below) that will provide
the foundation of an ESG action plan.
The action plan will support us to
measure, track and develop our ESG
maturity, and to meet the needs of
our stakeholders for increasing levels
of sustainability reporting and
comparability. We have aligned our
ESG priorities with the UN Sustainable
Development Goals (‘SDGs’) to reflect
where we believe the Company can
have the most significant impact.
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Our impact continued
Environment
We’re playing a pivotal role
in the reduction of emissions
across the maritime sector.
As a business, we are
committed to monitoring
and minimising our carbon
footprint in the nearer term
and achieving net zero by
2050 in line with current
UK government targets.
Driving the green
transition in shipping
Our purpose as a Company is to
‘enable smarter, cleaner global trade’
and to ‘lead positive change’, which is
aligned with our strategy, in particular
our strategic pillars of Breadth, Reach,
Understanding, People and Trust
(read more on pages 30 and 31).
As an enabler of global trade, we
work closely with our clients to lead
and facilitate positive environmental
change in shipping.
In line with our purpose and strategy,
the Board has set an objective to
work alongside our clients to minimise
emissions from the shipping industry by:
– Raising awareness and
understanding amongst our clients
of changes in IMO and EU regulation.
– Providing our clients with the data
and tools necessary to make
decarbonisation decisions.
– Helping clients to meet their
climate-related goals by working
with them to identify solutions.
The Board assesses whether this
objective has been met through
a number of metrics, which include:
– Developments in our Research
division to broaden the intelligence
available to clients.
– Investment in divisional teams to
better support our clients in their
decarbonisation strategies.
– Evolving our technology offering
to provide clients with the tools
to inform cleaner decisions.
– The way in which we are working
with other stakeholders in our
shipping community to further
support the shipping industry’s role
in meeting global decarbonisation.
The Board noted the progress set
out on the next page against these
metrics in 2023.
80 Clarkson PLC
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Metric Update
Developments in our Research
division to broaden the intelligence
available to clients.
– Growth of data streams on every vessel type, supporting clients in selecting
the most environmentally friendly ships.
– Enhanced provision of market-leading data on alternative-fuelled vessels,
Energy Saving Technologies, vessel speed and CII ratings.
– Release of market impact assessments around fuelling transition,
IMO short-term measures and the EU ETS.
– Development of a new dashboard on ship repair and green technology retrofits.
– Further enhancements of Renewables Intelligence Network, providing leading
data on offshore renewables generally, including the fast-growing offshore
wind market.
– Development of the Clarksons Research energy transition model, which
supports our clients in planning for the coming decades around changes
in the energy mix.
– Increasing use of data and intelligence by the global shipping industry,
academic research and policymakers as a trusted source.
Investment in divisional teams to
better support our clients in their
decarbonisation strategies.
– Acquisition by the Support division of DHSS, a leading provider of integrated
logistics services to the offshore renewable industry, based in the Netherlands
(see pages 49 to 50 for more information).
– Focused the Gibb Safety and Survival business in the Support division
on meeting the needs of the industry which supports the construction
and maintenance of offshore wind farms.
– Significant amount of business won by the Support division to support
offshore wind farms.
– Significant investment in new resources in US offshore wind in order to attract
more investment in the development of offshore wind vessels in the US market
and support the expansion of the offshore wind market.
– Continued training of our people so that they can raise awareness
and understanding amongst clients of changing IMO and EU regulations
around decarbonisation.
– Further development and expansion of the Green Transition team,
launched in 2021.
– Continued investment in a carbon capture presence within both the
Green Transition and gas teams.
– Investment in the car carrier team, which works with clients to meet the needs
of Electric Vehicle manufacturers and their customers to deliver sustainably
produced and transported vehicles.
– Enhancement of expertise within the newbuilding team to support clients
in their decisions regarding alternative-fuelled vessels, thereby evolving
the tonnage on the water towards lower-emitting vessels.
– Deal-flow within the Securities business across renewable and clean technology.
Evolving our technology offering
to provide clients with the tools
to inform cleaner decisions.
– Acquisition by the Maritech business of both MarDocs and Recap Manager,
software which enables companies to create, share and manage their
charterparties.
– Scaling the Sea business throughout 2023 to enhance products.
How we are working with other
stakeholders in the shipping
community to further support
its role in meeting global
decarbonisation.
– Continued work by the Financial division with banks and shipowners
to meet the needs of the Poseidon Principles.
– Joining the Carbon Capture and Storage Association (‘CCSA’) to help drive CO
2
shipping solutions and evolution of the sector. The CCSA is the leading European
association accelerating the commercial deployment of carbon capture,
utilisation and storage, an essential solution to reach net zero emissions.
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Reducing our
environmental footprint
As a business, we are committed to
monitoring and minimising our carbon
footprint in the near term and achieving
net zero by 2050 in line with current
UK government targets.
The Board has reflected on Clarksons’
position as a largely office-based
intermediary which has been
committed to minimising its Scope 1
and 2 emissions over recent years, and
the global nature of its business in which
overseas travel is essential for forming
and maintaining client relationships.
As a result, the Board recognises that
opportunities to significantly reduce
our own emissions further, whilst
growing the business, are limited.
Actions that we have already taken
over the last few years to minimise our
Scope 1 and 2 emissions are set out
below. We will continue to take actions
that will minimise our footprint further
where available.
– Roll-out of LED lighting, which
has already been implemented in
a number of offices, and continues
to be progressed across our largest
office in London.
– Incorporation of sustainable
considerations at the forefront of
the design of a purpose-built office
and warehouse facility in Great
Yarmouth for our CPS business.
– Increased use of technology to enable
virtual meetings, thereby reducing
emissions associated with travel.
– Changes to monitor power settings
to put monitors to sleep more
quickly and save energy.
– Purchase of a commercial standard
cardboard and paper shredder for
our CPS business to convert used
boxes into packing material for
items we distribute.
– Launch of an Electric Vehicle
scheme for UK employees,
alongside cycle-to-work schemes.
– Recycling of food waste to make
fertiliser and to generate gas for
electricity production.
– Minimising the use of plastic in staff
canteens by removing plastic cutlery
and using recycled materials for
takeaway products.
– Through the Employee Voice Forum,
raising awareness of and inviting
employee input into energy-saving
measures to be implemented.
Read more:
TCFD on pages 74 to 77.
2023 environmental performance
The Companies Act 2006 (Strategic
Report and Directors’ Report)
Regulation 2018 requires Clarkson
PLC to disclose annual UK energy
consumption and Greenhouse Gas
(‘GHG’) emissions from Streamlined
Energy and Carbon Reporting
(‘SECR’) regulated sources. Energy
and GHG emissions have been
independently calculated by Envantage
Ltd for the 12-month period ending
31 December 2023.
Reported energy and GHG emissions
data is compliant with SECR
requirements and has been calculated
in accordance with the GHG Protocol
and SECR guidelines. Energy and GHG
emissions are reported from buildings
and transport where operational
control is held – this includes electricity,
natural gas, gas oil and business travel
in company-owned vehicles and grey
fleet, water, waste and upstream
paper emissions. The table on the
next page details the SECR-regulated
energy and GHG emission sources
from the current and previous
reporting periods.
Summary
Following the easing of COVID-19
pandemic restrictions and the return
to business-as-usual across the globe,
Clarksons’ total GHG emissions have
continued to increase since 2022.
Overall, on a market basis, our
emissions were 8,755 tCO
2
e, which
is an increase of 48% on 2022. On a
location basis, emissions were 8,740
tCO
2
e. Although this is a 47% increase
on 2022, emissions remain lower than
pre-COVID-19 levels in 2019.
While Scope 1 and 2 emissions and
energy consumption levels remained
comparable to 2022, the continued
resumption in business travel following
COVID-19 resulted in a significant
increase in Scope 3 emissions. This
has been predominantly driven by flight
emissions, which contributed to 69%
of total emissions. We believe that
overseas travel is integral to a global
relationship-led business. The increase
in emissions is therefore in line with our
expectations, albeit Scope 3 emissions
remain below pre-COVID-19 levels
in 2019.
With regards to our carbon emissions
intensity, in 2023 Clarksons averaged
4.3 tCO
2
e (an increase of 30% on
2022: 3.3 tCO
2
e) per employee.
Our impact continued
82 Clarkson PLC
2023 Annual Report
Our energy efficiency initiatives
We are committed to reducing
our environmental impact and
contribution to climate change
through continuous improvement
procedures. Energy-efficient lighting
controls and motion sensors were
installed in the London office, whilst
there is continued focus on initiatives
already in place across our global
offices to recycle paper and food
waste and print less.
Outlook
We are committed to monitoring
and minimising our carbon footprint
in the nearer term and achieving
net zero by 2050 in line with current
UK government targets.
Methodology
We are reporting our GHG emissions
and associated energy use as required
by the Companies (Directors’ Report)
and Limited Liability Partnerships
(Energy and Carbon Report) Regulations
2018 (the ‘2018 Regulations’) for our
global operations.
We have reported the emission
sources for which we have operational
control for our global estate for the
reporting period 1 January 2023 to
31 December 2023. A sample period
of November 2022 to October 2023
was used to allow time to gather data
and meet the internal deadline for this
Annual Report.
Our GHG emissions were calculated
in accordance with the requirements
of the WRI ‘GHG Protocol Corporate
Standard (revised version)’ and Defra’s
‘Environmental Reporting Guidelines:
Including streamlined energy and carbon
reporting guidance’ (March 2019).
We have applied the appropriate
GHG conversion factors from the
UK Department for Energy Security
and Net Zero, the International Energy
Agency, as well as the EXIOBASE
environmentally extended input-output
model for expenditure conversions.
We have included in scope all the
properties where we are directly
responsible for the consumption of
energy, including our tenanted offices.
Our carbon footprint for the 2023
reporting year was calculated from
activity data for Scope 1 emission
sources and electricity consumption
in Scope 2.
This disclosure builds on the minimum
requirements for compliance with the
2018 Regulations to include additional
material Scope 3 emissions from
business travel and office operations
(waste, water, paper). Our emissions
are presented on both a location
and market basis. Location-based
reporting applies a country-specific
factor to electricity consumption
whilst market-based reporting takes
account of the specific electricity
tariff/supplier used.
DHSS was acquired by the Group
in February 2023. The emissions
inventory for DHSS for 2022 was
used as a proxy for emissions in 2023.
Following the GHG Protocol, the 2022
SECR disclosure for Clarkson PLC has
been adjusted to reflect the addition
of DHSS, so that a like-for-like
comparison can be made.
Whilst we have endeavoured to obtain
accurate and complete data wherever
possible, where there were data gaps,
we have used reasonable estimations
such as annualisation of actual data,
use of expenditure data as a proxy and
typical office consumption benchmarks.
Clarksons’ GHG emissions (tCO
2
e) and associated energy consumption (MWh) for 2023
UK
2022
(tCO
2
e)
Global
(excluding
UK) 2022
(tCO
2
e)
UK
2023
(tCO
2
e)
Global
(excluding
UK) 2023
(tCO
2
e)
% change
in total
emissions
(vs 2022)
Scope 1 765.0 239.5 448.6 565.4 1
Natural gas 236.0 88.0 138.8 105.0 -25
Other fuels 240.0 60.6 228.3 57.4 -5
Company cars 125.0 90.9 43.8 370.6 92
Fleet 161.0 – 37.7 32.4 -56
Refrigerants 3.0 – – – -100
Scope 2 location-based (electricity) 687.0 578.6 638.2 685.4 5
Scope 2 market-based (electricity) 664.0 568.6 653.9 685.4 8
Scope 2 purchased heat and cooling – – – 86.3 100
Scope 3
1
460.0 3,226.0 3,475.1 2,840.1 71
Total Scope 1 + 2 + 3 (location-based) 1,912.0 4,044.1 4,561.9 4,177.3 47
Total Scope 1 + 2 + 3 (market-based)
2
1,889.0 4,034.1 4,577.6 4,177.2 48
Total Energy Usage (MWh) 7,180 2,990 5,234 4,915 -1
Total global (including UK) emissions/FTE 3.3 4.3 30
1 Scope 3 emissions from business travel and office operations (waste, water, paper).
2 Location-based factors have been applied where there are no residual mix factors available.
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Social
Focusing on our people
and our communities.
Supporting our people
to thrive
Clarksons is a relationship-driven
business. Our people bring innovation,
expertise and drive to deliver an
unrivalled service to our clients. We
continue to attract top talent and it is
our people that maintain our position
as the world’s leading provider of
integrated shipping and offshore
services. We are dedicated to delivering
a diverse and engaging workplace
where people can thrive, both
professionally and personally. During
2023, we have continued to invest in
and grow the Clarksons community.
Engagement
Engaging with our people and
understanding what is important
to them is essential to our ongoing
success. We pride ourselves on a
culture that promotes personal, open
and direct engagement at every level.
We ensure that our employees
understand what the organisation
is focused on achieving and that each
has a role contributing to the success
of the Group. We support managers
to understand and meet the needs
of their teams through open and
constructive dialogues. Our people are
encouraged to share regular feedback
and insights through open lines of
communication, as well as more
structured channels.
The Employee Voice Forum continues
to serve as an invaluable opportunity
to engage with our people and learn
what is important to them. The
sessions bring together Non-Executive
Directors with a cross-section of
employees from various divisions,
levels and tenure to share questions,
feedback and insights. The Forum is
chaired by Heike Truol, our Employee
Engagement Director, and run on
a quarterly basis, moving between
locations to ensure we receive a
global perspective. Participating
employees are given the opportunity
to raise any issues, including regarding
remuneration, that they deem relevant
or appropriate. In 2023, topics
discussed included ESG, technology
and compliance in shipping markets,
being part of the global group, and
communication methods and channels.
Insights are fed back to the Executive
Team and the Board; we continue to
invest in all these areas and welcome
continued employee collaboration.
Our impact continued
84 Clarkson PLC
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As well as the Employee Voice Forum,
we have a variety of means to engage
with our people:
– Global executive and divisional
management forums that
meet monthly.
– Employee pulse surveys on specific
topics and divisions.
– Regular internal communications
highlighting sector news, company
updates, colleague interviews and
educational content.
– Presentations and video updates
from our CEO and CFO & COO
on key matters.
– Events and offsites to bring
teams together to connect
the Clarksons community.
Talent management, promotion,
recognition and reward
We provide our people with world-class
opportunities in an innovative and
ever-changing industry, and we are
proud that our employees choose
to build and progress their careers at
Clarksons. By investing in our people,
we empower them to do more and
develop as future leaders. Our talent
management activities include:
– Global executive and divisional
management forums that
meet monthly.
– A structured global promotions
process that is conducted
bi-annually based on consistent
assessment criteria.
– Clarksons’ competency and
behaviours framework which is
integrated into our assessment criteria
for prospective candidates and
employee performance management.
– A bespoke management and
leadership development programme.
– Regular sessions with Maritime
Masters on industry trends and
technical insights.
– A structured annual performance
review model. Conducted annually,
the process has been piloted and
scaled across various divisions.
The framework will help employees
to better understand how they can
excel in their roles and drive their
career progression.
Recruitment
Our company culture and success are
underpinned by our values: integrity,
excellence, collaboration and
challenge. These values are central to
our recruitment strategy and support
us to hire the best talent.
We continue to challenge our talent
agencies to operate their Diversity
and Inclusion policies in a manner that
matches our aspirations and ensure
that we are increasing the diversity of
recruitment pools, and to partner with
organisations that share our values.
We have also reviewed and updated
our recruitment practices to encourage
a broader cohort of applicants and
are leveraging our employer brand
to reach more diverse candidates.
Diversity, equity and inclusion (‘DEI’)
We believe that a diverse business,
is a better business. Our aim is to
deliver a diverse, inclusive and equitable
workplace where the most talented
people in our markets can thrive.
We have made strong progress in
embedding DEI practices across the
business, including enhanced policies,
training, recruitment and awareness
campaigns. We recognise that there
are some challenges to the pace of
change to diversity across the industry,
particularly regarding gender; we are
committed to driving that change.
We are continuing to build the diversity
of our talent pipeline through skills and
experience development programmes,
such as paid internships and the
Trainee Broker Programme. We have
reached an increasingly broad pool
of candidates through careers events,
partnerships and campaigns.
Throughout the year we highlighted
stories from women across Clarksons
to inspire the next generation of
women to join the maritime industry.
As part of the campaign, we held a
successful networking event to bring
together women and colleagues from
across the business. We look forward
to building on this campaign over the
next year and progressing DEI within
the Clarksons community.
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Our impact continued
Read more:
Diversity, equity and inclusion
on pages 85 and 119.
Gender diversity
As at 31 December 2023
Male 21
Female 3
Male 209
Female 19
1 Employees who have responsibility
for planning, directing or controlling
the activities of the Group, including
all directors of subsidiary companies.
Male 188
Female 57
Male 301
Female 138
Male 1,446
Female 578
Executive Committee
Senior managers
1
All employees
Executive Committee
and direct reports
New hires
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Learning and development
We provide our people with continuous
opportunities to learn, develop their
skills and advance their careers.
We pride ourselves on delivering
a dynamic and engaging environment
for professional development through
close mentoring and experiential
learning. This hands-on approach
is complemented by bespoke
development programmes and digital
learning tools.
Our teams can continually develop the
depth and breadth of their expertise
to advance their careers. The Clarksons
Academy – our centralised global
learning portal – provides access
to a wide range of learning and
development opportunities, from
technical and industry training to
personal and professional skills. We
also provide global access to online
learning programmes with a leading
provider, Goodhabitz.
Our bespoke management and
leadership development programme
supports leaders to build thriving
teams that can adeptly respond to the
fast-changing demands of the industry.
With a wealth of in-house expertise
and a strong network of partners,
we have produced a full calendar
of seminars and webinars to keep our
people continually informed on current
affairs, key topics and challenges in the
maritime industry. These educational
sessions include our continued
partnership with the Maritime UK’s
Maritime Masters programme.
We continue to support employees to
study for membership of the Institute
of Chartered Shipbrokers. Membership
is attained via a series of modules
and exams including legal principles,
shipping finance, port agency and
other sector-specific subjects.
In accordance with the Listing Rules, we report on the gender identity and ethnicity of our Board and executive management.
The data below was collected from Directors on a voluntary basis. The data of executive management was captured via the
Company’s internal HR system on a voluntary basis, with 19 different options being provided under ethnicity.
Gender
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
1
Number
in executive
management
2
Percentage
of executive
management
Men 5 63% 3 21 87%
Women 3 37% 1 3 13%
Not specified/prefer not to say – – – – –
Ethnicity
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
Number in
executive
management
Percentage
of executive
management
White British or other White
(including minority-white groups) 7 89% 4 19 79%
Mixed/Multiple Ethnic Groups 1 11% – 1 4%
Asian/Asian British – – – 3 13%
Black/African/Caribbean/Black British – – – – –
Other ethnic group, including Arab – – – – –
Not specified/prefer not to say – – – 1 4%
1 Defined as Chair, Senior Independent Director, CEO and CFO & COO.
2 Defined as direct reports of the CEO and the Company Secretary.
We are also proud to have launched
Clarksons’ Buddy Programme.
The 12-month programme provides
an opportunity for those early in their
careers at Clarksons to be mentored
by senior colleagues. The programme
has been successfully piloted in the
Broking division, with 30 employees
paired with a mentor. Over the coming
year we plan to expand it to other
teams across the business.
Opportunities for young people
Clarksons is committed to supporting
the next generation of talent to discover
the maritime industry. Over the summer,
we welcomed 11 interns who spent five
weeks in our London office learning
about the business and gaining
experience, insights and exposure
across the shipbroking departments,
as well as assisting the brokers.
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development
Our impact continued
In September, we launched our 2023
Trainee Broker Programme. Following
a robust and structured selection
process, we have welcomed 18 trainees
to our offices across seven different
countries. The programme is designed
to provide trainees with experience
across various broking teams to
accelerate their career development,
whilst also developing the next
generation of brokers. The programme
is also intended to increase diversity
within shipbroking and nurture the
best talent to support our clients.
Over the next year, our trainees will
undertake three broking rotations,
gaining invaluable on-the-job
experience within their assigned teams.
The programme provides accelerated
learning and the development of
technical and professional knowledge
and skills, with unmatched access to
leading resources and mentorship.
Accelerating career
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Health, safety and wellbeing
The health, safety and wellbeing of
our people remains a key priority for
us. We offer a range of resources to
all employees, including digital therapy,
access to the Thrive mental health app
and a comprehensive Employee
Assistance Programme. This year,
we marked Mental Health Awareness
Week with several events to promote
good mental health practices and
the support services available to
all employees.
We maintain policies and procedures
to minimise the risk of injury and ill
health in our workforce as well as
for visitors attending our premises.
The Board has approved the Group
Health and Safety Framework and has
appointed the CFO & COO as sponsor
for health and safety. The Group Health
and Safety Committee is responsible
for monitoring compliance of the
framework and reporting key updates
and any areas of concern to the Board.
Each site is responsible for managing
its own health and safety in line with the
Group Health and Safety Framework
and in compliance with local laws and
regulations. With the exception of some
higher-risk activities within our Support
division, such as port agency and
freight forwarding, all locations conduct
office-based activities only and are
therefore considered relatively low risk.
Health and safety within the Support
division is managed by a Health and
Safety Committee, which reports to the
Group Health and Safety Committee.
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Delivering impact
in our communities
Industry partners
Throughout 2023, we partnered with
a number of maritime associations
which are paving the way for the
future of the maritime industry.
This was demonstrated by our
continuing support for Maritime
UK’s Maritime Masters programme.
We ran a series of webinars for
postgraduate students studying for
Master’s qualifications at nine leading
UK universities and business schools,
culminating in us hosting a virtual
finalists reception in October. These
webinars proved to be very popular
and we aim to provide them again
in support of the 2024 programme.
Our ongoing involvement with
Maritime UK’s Maritime Masters
supports the significant role we
play in encouraging and developing
young talent in shipping. This year
we wanted to support students further
by increasing their connectivity to
the industry. We hosted three events
(two webinars and one in-person),
geared specifically to aid students’
learning and understanding of the
challenges and trends within the wider
maritime industry. The in-person event
focused on people in shipping and the
skills needed to succeed, which will
help the students to take proactive
steps in improving their employability
within a competitive marketplace.
Clarksons Research provides over
50 maritime university and research
programmes across the world with
access to research and data, helping
important academic research and
supporting the learnings of our clients
and colleagues of the future. Many of
these relationships are long-standing,
involve both undergraduate and
postgraduate research and extend
to universities based in key maritime
centres around the world, including
Asia, Europe and the Americas.
We also provide data and intelligence
to inter-governmental organisations,
governments, regulators and various
industry and trade bodies, helping
frame debate and policy decisions
around the development of the shipping
industry, including climate change
and safety at sea.
Charitable giving and volunteering
At Clarksons, we foster a culture of
giving back via our Corporate Social
Responsibility programme. Our CSR
Committee is tasked with initiating,
encouraging and supporting staff
from across the business to participate
in activities that will have a positive
impact on the charities and causes
they care about. To us, charity is
more than money; it is about giving.
Our charitable giving falls broadly into
three categories of giving: giving time,
giving energy and providing funding.
This affords us a rounded approach
whereby we support a variety of
different causes such as health,
education, community and
maritime-related causes. This blend
ensures that employees from across
our offices, and at all levels, feel
empowered to participate in charitable
activities in a way that suits them.
Giving time
We encourage our employees
to volunteer their time and skills:
– The Renaissance Foundation (‘RF’),
is a charity that supports young
carers and patients. In 2023,
RF moved into a new premise in
Aldgate, London. The Clarksons IT
team spent several days supporting
RF in setting up their IT equipment,
internet, wifi, and A/V requirements
within the new space, in readiness
for the young people to use.
– As part of a wider excursion by RF
to the Nobel Peace Prize ceremony,
the Clarksons Oslo office hosted RF
whilst the young people were in the
city. Clarksons was able to provide
an insight into the industry and
office life.
– The Singapore office organised
its annual beach clean-up day,
whilst staff in the London office
participated in a litter pick around
St Katharine Docks and surrounding
streets, in recognition of Earth Day.
– The Clarksons Dubai team came
together to pack and distribute
nearly 100 ‘health and hygiene’
bags for the construction workers
in their local communities.
– To start the festive period, we held
two workshops in the London office
to help wrap gifts and pack sweets
to be distributed by Spread a Smile
in their efforts to bring some joy
and laughter to seriously ill and
hospitalised children over the
Christmas holidays.
Our impact continued
90 Clarkson PLC
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– We recognise and support the
ongoing efforts of our employee Vicki
Oosthuizen, who with the support
of the CSR programme has been
able to make generous donations
to soup kitchens in Cape Town,
South Africa; a ‘blanket and beanie’
drive; a Christmas present giveaway
for underprivileged children; and
garden development project for
Herbert Street Special School.
Giving energy
We support employees in their
sporting efforts:
– Our annual Charity Giving Day saw
over 250 employees from 13 global
offices take part in the Big Row,
challenging participants’ endurance
and grit as well as generosity with
over £37,000 being raised by
employees. The money raised went
to The Clarkson Foundation, whose
trustees identified Bowel Cancer UK
and Hospice in the Weald as key
charities to provide grants to.
– We are proud to support and
encourage employees’ personal
fundraising efforts. In 2023 this
included Harry Shaw from the Dubai
office who ran 100km to raise money
for humanitarian aid in Gaza; Neil Gill
for the 500km Bologna to Rome
Cycle; Ryan Grant for his Ben Nevis
Climb for Brainwave; and Rob
Poskitt’s participation in the
Essex100 bike ride.
Providing funding
We continued our annual
participation in Mercy Ships’ Cargo
Day in November 2023, with brokers
across our offices forgoing 50% of
their commission. This resulted in
a contribution of over US$75,000
to Mercy Ships, a development
organisation that deploys hospital ships
to some of the poorest countries in the
world, delivering vital, free healthcare
to people in desperate need.
We have continued to make charitable
giving easier through the Payroll Giving
scheme. UK employees are able to
make regular, tax-free donations from
their gross pay.
The CSR committee provided funding
for the Mission for Seafarers and the
Aberdeen Seafarers Centre which
provides seafaring communities with
support for both their emotional and
physical welfare.
Much of our charitable donating is
provided to The Clarkson Foundation,
an independently run grant-giving
charity. You can read more about
The Clarkson Foundation on
pages 92 to 97.
Read more:
The Clarkson Foundation on pages 92 to 97.
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Introduction
from the
Chair
Having established The Clarkson
Foundation (the ‘Foundation’) in
November 2020, we are immensely
proud to look back at the impact we
have made over the last three years,
including raising £1.40m and donating
to 68 great causes.
We have supported so many incredible
projects during this period ranging
from minibuses to playgrounds,
crayweed reforestation to installation
of disabled toilets, all focused
predominantly on poverty, children,
health and the environment. During this
time the Trustees have met with many
truly inspirational leaders, each of
whom lead charities that have excelled
in their targeted areas and are every
day making a significant positive
impact on the world in which we live.
Each project we support has a
predefined outcome and impact;
each project is fully researched and
considered by the board of Trustees;
and the success of every project is
monitored and supported before,
during and after delivery. You will hear
about some of the many projects from
my fellow Trustees later in this report
– and each project, however big or
small, is treated with the same care
and attention.
Having grown the ambitions of the
Foundation since inception, during
2023 we have been working on a very
exciting project, the details of which
we hope to announce very soon.
At the end of last year, we presented
the project, together with our charity
partner, to the Board of Clarkson PLC
and we were delighted that on the
back of this presentation the Board
determined to support the Trustees
with a donation to the Foundation of
£1.25m. We are currently finalising the
arrangements for the delivery of the
project and will update our website
with a release, setting out the full
details, in due course.
This donation, when added to those
already made, now means that in three
years we have raised £2.65m of which
£2.1m has been donated or pledged so
far to support 69 causes and projects.
On behalf of the Trustees, I thank the
Board of Clarkson PLC and each and
every one of our donors for the huge
support given to the Foundation.
In 2024 we will continue to strive
towards achieving our objectives to
help more people, to create lasting
solutions and to make a real positive
difference to the world in which we live.
Jeff Woyda
Chair
The Clarkson Foundation
We are continually
inspired by the
charity leaders
who are making
such a positive
difference. Where
we can support
them, we will!”
Our impact continued
Scan to view How our donations
are helping others
Since November 2020, The Clarkson
Foundation has raised
£2.65m
Number of causes we’ve donated
or pledged to
69
92 Clarkson PLC
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Independent
decision-makers
As Trustees, we’re empowered to
bring forward suggestions and are
open to applications from the causes
that align with our collective ethos of
achieving lasting impact. We actively
seek out charities where we can build
a relationship and work closely to
ensure our grant-giving can go as far
as possible. The range of charities that
we support encompasses causes that
support children and young people,
tackling issues like homelessness
and poverty, and physical and mental
health. Importantly, we’re in a position
where we can also be agile, and support
causes reactively in times of crisis.
The Lotus Flower
Spotlight
stories
Late in 2022, we connected with
Taban Shoresh, the founder of The
Lotus Flower, a charity that focuses
primarily on women and their families
who have been impacted by conflict.
Across 2023 we were privileged to
provide the required funding to run
its crucial Rwanga support centre
in Kurdistan. The support centres
are a vehicle that empower vulnerable
women and girls so that they have
opportunities to learn, heal and grow.
They are given the tools to become
financially independent and can start
rebuilding their lives. Since 2016,
The Lotus Flower has impacted
60,000 people. A big congratulations
to Taban Shoresh OBE, founder of
the charity, for her recognition in the
2024 New Year’s honours list for her
impressive work.
Leo Askaroff, Trustee
A brilliant
springboard for
women to rebuild
their confidence
and find a
brighter future.”
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Our impact continued
Following the success of our first
project with Dig Deep to install safe
toilet facilities across five schools
in Bomet County, Kenya, we were
delighted to continue to support
Chief Executive Ben Skelton on a new
initiative to implement a sustainable
way of bringing clean water to the
whole county. In 2023, we supported
eight spring protection projects and
a community rainwater harvesting
solution, to bring a constant source of
clean water closer to each community.
The population currently has limited
access to clean, readily available, reliable
drinking water, resulting in widespread
health and sanitation problems, which
in turn impacts education and earning
potential. Providing clean water
solutions will help break the cycle of
poverty and poor health. We’re excited
to share that the nine projects are
close to completion.
Scan to watch the video
Kate Thompson, Trustee
Dig Deep
The difference
the projects are
making to Bomet’s
community is night
and day.”
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The Renaissance
Foundation
Congratulations to The Renaissance
Foundation (‘RF’) which, in 2023,
moved into its new premise in
Aldgate, London. The ‘Hub’ is the first
permanent home for the charity. RF
looks to ignite a spark in their young
carers and patients so that they can
reach their full potential and embark
on a positive journey into adulthood.
We were thrilled to be invited by Sat
Singh, RF’s CEO, to visit the Hub and
see firsthand the young people using
the music and media centre that the
Foundation funded – the talent and
enthusiasm in that room was inspiring!
The new HQ provides the young people
with a safe place to hang out with one
another and build connections. It can
be used as a workshop space or simply
as a quiet spot to get some homework
done. These amazing young people
carry a lot of responsibility in their
personal lives so it’s great to see
them being able to thrive.
Lily Bagshaw, Trustee
RF’s young
people are such
go-getters and
will be a true
asset to society!”
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When we found out that 9.3 million
adults in the UK struggle to afford to
eat every day, and 3.7 million children
are at risk of missing their next meal,
we felt compelled to find a way to
help. The Felix Project is a brilliant
charity that helps to bridge the gap
between good quality food which
would otherwise go to waste and the
people who need it. The Foundation
is committed to supporting 20 schools
across London with weekly food
deliveries which are then distributed
to families through after-school market
stalls, providing up to 278,000 meals
annually for those families, whilst
teaching the children about nutrition and
the benefits of reducing food wastage.
Such a positive and educational
approach for lasting impact!
We hope Spread
a Smile’s positivity
brings some joy
and support to
the children and
their families.”
Spread a Smile is an incredible charity
that addresses challenges that are
unimaginable for most by bringing joy
and hope to seriously ill children and
their families in hospitals and hospices
across the UK. Together, we enabled
Spread a Smile entertainers to make
120 hospital visits, spreading smiles to
over 1,900 children and their families.
In the run-up to the festive period,
the Foundation was delighted to
provide further support by funding
the purchase of Christmas presents
for distribution to children undergoing
treatment. Again, congratulations to
founders Josephine Segal MBE and
Vanessa Crocker MBE on their
much-deserved recognition in the
2024 New Year’s honours list for their
work over the last 10 years.
Rich Haines, Trustee
Our impact continued
Spread a Smile The Felix
Project
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Sports can be an incredibly powerful
channel in which to engage young
people who could be facing challenges
engaging at school, suffering with
mental health or anxiety, or potentially
have disruptions in their home lives.
These factors could easily lead to
anti-social behaviour. Over 2023, we’ve
supported School of Hard Knocks,
Carney’s Community and The Wave
Project in their respective programmes,
utilising sports to make a positive
impact on young people’s lives.
Thank you!
The impact that has
been achieved for the
beneficiaries of individual
charities would not have
been possible without the
support of our donors.
We’d like to say a big
‘Thank You’ – the grants
that the Foundation is
able to provide is a result
of their generosity.
We are passionate about sharing
stories of the many worthy causes
we support and the impact that our
grants are having on the people and
communities around the world. From
food bank donations in deprived areas
of London, to sensory gardens at
cancer hospices, or providing happy
memories for terminally ill children.
In doing so, not only does it bring
our donors on the journey of progress,
but also enables us to raise awareness
of the causes and the awe-inspiring
teams that continue to make good
things happen. We’re proud to have
a platform that is a force for good and
a channel for effective grant-giving.
We look forward to sharing more
progressive and impactful updates
with you.
Read more:
About The Foundation at
www.theclarksonfoundation.com
Dharani Sridharan, Trustee
It’s great to see
how The Felix
Project works
within the
community
to enhance
its knowledge
of nutrition and
food waste.”
Scan to find out more
Widening
our reach
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Governance
Maintaining robust
governance practices.
Leading a responsible
business
Ethics at Clarksons
We are committed to conducting
our business in an ethical, honest
and professional manner wherever
we operate and to:
– Act fairly, honestly and with
integrity at all times and in everything
we do, and to comply with all
applicable laws.
– Treat our employees, clients,
contractors, suppliers and other
stakeholders fairly and with respect.
– Create a high-quality,
equal-opportunity working
environment for all our employees,
based on merit and free from
discrimination, bullying and harassment.
– Respect human rights.
Compliance at Clarksons
– leading positive change
Our senior management have created
and fostered a culture of ethics and
compliance with the law at all levels
within Clarksons. They have ensured
sufficient resources with authority
and autonomy to develop and run
our compliance programme.
We have created a risk-based
compliance programme following
risk assessments of a variety of factors,
such as the location of our operations,
our industry sector, the regulatory
environment, potential clients and
business partners, transactions with
foreign governments, gifts, travel
and entertainment. The programme
seeks to focus on high-risk areas and
transactions rather than more modest
and routine transactions.
To enshrine our commitment to act
legally, we have an easily accessible
and comprehensible Compliance Code
which sets out the expectations and
standards we place on ourselves with
regard to full compliance with relevant
laws. Following our Compliance Code
is mandatory and all employees,
officers and Board members are
required to read, understand and
commit to it annually.
Our impact continued
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The Compliance Code contains a suite
of robust and proportionate policies
and procedures that mitigate legal risks
such as sanctions breaches, bribery
and corruption, money laundering,
insider dealing, market abuse and
conflicts of interest.
Tailored training and communications,
including annual mandatory online
training modules, ensure that policies
and procedures are integrated into
the organisation. Additional training
is given to employees in relevant control
functions and employees know where
to obtain clear guidance or assistance
relating to compliance policies.
Our global compliance support
team helps embed the policies
and procedures across our offices
and divisions.
A clear and accessible whistleblower
policy exists to enable reporting
of misconduct in confidence
(and anonymously) to an independent
external provider without fear of
reprisal. Whistleblowing reports arising
from its operation are investigated
appropriately and reported to the
Board in line with the UK Corporate
Governance Code. Where required,
local mandatory whistleblowing
policies also exist.
Sound internal controls are in place
which help reduce the risk of inter alia
money laundering, sanctions breaches
and bribery and corruption. These
include risk-based due diligence
on all staff, clients and third parties;
transparent accounting records;
external audit and an outsourced
internal audit function; and an effective
Audit and Risk Committee.
In addition, our regulated businesses
are subject to further compliance
requirements which are set out
in their specific compliance codes
and implemented through
specific procedures.
Anti-bribery and corruption (‘ABC’)
In line with overall compliance
processes, the Group has a robust
ABC compliance programme
consisting of:
– A detailed risk assessment.
– A formal ABC policy highlighting
our zero tolerance of bribery and
corruption which is communicated
to and applies to all employees and
third parties undertaking business
for or on behalf of the Group.
– An external Group ABC policy
statement available on our website
to communicate the Group’s
ethical position.
– ABC online and bespoke training
for all employees to raise and
reinforce awareness, particularly with
those open to greater risk of bribery
and corruption, and additional
training for employees in relevant
control functions.
– Risk-based due diligence, carried
out on clients, contractors, suppliers
and employees before contracting
with them and periodically thereafter.
– A sound system of financial controls
which helps reduce the risk of bribery
and corruption, such as separation
of duties and delegated authority
levels, transparent accounting records
and a requirement for full supporting
documentation for all transactions.
– A comprehensive set of policies
which address possible bribery and
corruption risks, for example conflicts
of interest, expenses and gifts and
hospitality policies.
– Our whistleblower policy to permit
reporting of misconduct to an external
provider without fear of reprisal.
– External audit and an outsourced
internal audit function, whose
effectiveness is evaluated annually.
– An effective Audit and Risk
Committee, which oversees
our compliance programme.
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Sanctions
Clarksons has a truly best-in-class
sanctions compliance programme. It
has positively led the way in sanctions
risk management in shipbroking and
in the fast-changing world of sanctions.
We protect ourselves and indirectly
our clients with the support of bespoke
proprietary sanctions tracking tools,
illicit behaviour red flag tools and the
largest KYC team in the industry.
Human rights
We believe that the respect of human
rights is integral to being a responsible
company and we are committed to
treating individuals with respect
and dignity.
Clarksons places value on difference
and believes that diversity of people,
skills and abilities is a strength that
helps us to achieve our best. Any
discrimination based on race, religion,
nationality, gender, age, marital status,
disability, sexual orientation or
political affiliation is prohibited
within the business.
We have a Supplier Charter in which
we ask our suppliers, amongst other
things, to commit to respecting human
rights, diversity, equity and inclusion
and the environment.
We are committed to providing
a workplace free of any form of
harassment or discrimination and
expect our suppliers to do the same.
Read more about our approach to
diversity, equity and inclusion on
page 85.
Modern slavery
Slavery, servitude, forced labour and
human trafficking (‘modern slavery’)
is a global and growing issue, and no
sector or industry can be considered
immune. We are committed to
ensuring that there are no forms of
modern slavery within our operations
or supply chains.
Our supply chain comprises worldwide
suppliers providing a wide range of
support functions and products
including catering, maintenance,
information technology, cleaning
and security. In our material supplier
contracts in the UK, we request that our
suppliers commit to ensuring that their
supply chain complies with legislation
with regard to modern slavery.
Our General Terms and Conditions
also include client obligations to
comply with modern slavery legislation.
Our procurement procedures seek to
ensure that our suppliers, contractors
and service providers act ethically
and with integrity, and have in place
effective systems and controls so that
modern slavery is not taking place
within their own businesses. Our
Supplier Charter asks our suppliers
to commit to respecting human rights,
diversity, inclusion and the environment.
Suppliers which do not meet the
standards we expect are not engaged
to provide goods or services.
We remain committed to building and
strengthening our existing policies and
practices to eliminate modern slavery
and human rights violations in our
supply chain. We therefore continue to
review the effectiveness of our current
arrangements and, where necessary,
implement additional safeguards
and procedures.
In line with the Modern Slavery Act
2015, we publish an annual Modern
Slavery and Human Trafficking
Statement on our website.
Suppliers
Whilst we do not consider suppliers
to be a significant stakeholder in our
business, we are committed to treating
our suppliers fairly. You can read more
about how the Board takes account
of suppliers in its decision-making
on page 61.
Our impact continued
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Non-financial and sustainability information statement
The table below constitutes the Company’s non-financial and sustainability
information statement, in compliance with sections 414CA and 414CB of the
Companies Act 2006.
Reporting requirement Key policies and standards, and more information
Environmental
matters
Read more:
Environment on pages 80 to 83.
Our employees Global Staff Handbook
Global Diversity and Inclusion Policy
Compliance Code
Global Privacy Statement and Policy
Health and Safety Policy Statement
Whistleblowing Policy
Read more:
– Our people on pages 84 to 89.
– Leading a responsible business on pages 98 to 100.
Social matters CSR Committee
Read more:
Communities on pages 90 and 91.
Human rights Ethics Policy Statement
Modern Slavery and Human Trafficking Statement
Global Privacy Statement and Policy
Read more:
– Our people on pages 84 to 89.
– Leading a responsible business on pages 98 to 100.
Anti-corruption
and anti-bribery
Anti-Bribery and Corruption Policy
Read more:
Leading a responsible business on pages 98 to 100.
Business model
Read more:
Our business model on pages 22 and 23.
Principal risks
Read more:
Risk management on pages 68 to 71.
Non-financial
key performance
indicators
Read more:
Key performance indicators on pages 20 and 21.
Climate-related
financial disclosures
Read more:
TCFD on pages 74 to 77.
The Strategic Report on pages 10 to 101 was approved by the Board and signed
on its behalf by:
Jeff Woyda
Chief Financial Officer & Chief Operating Officer
1 March 2024
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Good governance is essential to
enable us to lead positive change.
Governance at a glance
Highlights in 2023
– We maintained our focus on
executing our strategy, which
continues to deliver sustainable
business performance for all
of our stakeholders.
– As a people business with a
high-performance culture, we
continued to prioritise succession
planning, receiving regular updates
on ongoing initiatives in this area
including on performance and
development and Diversity,
Equity and Inclusion (‘DEI’).
– We conducted our first ESG
materiality assessment to confirm
the priorities and areas where
Clarksons can have the most
significant impact.
– We engaged with our shareholders
on a range of areas including
remuneration outcomes,
environmental matters, succession
planning and diversity.
Board meeting attendance
Meetings
Laurence
Hollingworth
(Chair) 8/8
Andi Case 8/8
Jeff Woyda 8/8
Martine Bond
1
2/8
Sue Harris 8/8
Dr Tim Miller 8/8
Birger Nergaard 8/8
Heike Truol 8/8
1 Unable to attend meetings due to illness.
The Chair ensured that there was an
opportunity for Martine to provide
comments on the business of the
meeting in advance.
Engagement activities:
Shareholders
94
meetings with shareholders
and potential investors attended
by the CEO and CFO & COO
17
meetings with shareholders attended
by the Chair and/or the Chair of the
Remuneration Committee
Priorities for 2024
Our priorities for 2024 remain largely
unchanged from our areas of focus
in 2023, and are as follows:
– Continuing to execute on our
successful strategy, ensuring that
it keeps delivering sustainable
business performance for all
of our stakeholders.
– Finalising the search for a
non-executive director with
the appropriate skill-set.
– Focusing on those initiatives
that enable our people to thrive,
developing our pipeline for executive
succession, and maintaining our
high-performance culture.
– Consideration of actions to be
taken following updates to the
UK Corporate Governance Code.
How the Board spent its time
Business performance
and operations
31%
Financial matters 7%
Governance 8%
Risk management 3%
Stakeholder engagement 12%
Strategy 39%
Engagement activities:
Employees
54%
of employees participating
in share plans/holding shares
31%
of eligible employees took up
an invitation to join ShareSave
(or the local equivalent) in 2023
102 Clarkson PLC
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On behalf of the Board, I am pleased
to present the Corporate Governance
Report for 2023.
Our corporate governance
framework continues to support
the delivery of our successful strategy.
The macro-economic environment,
together with the regulatory and
governance environments, continue to
develop and grow in scope. We must
keep meeting the challenges they give
rise to in order that Clarksons continues
to deliver sustainable business
performance to generate value
for its stakeholders.
The feedback from our engagement
with our stakeholders provides
valuable insight as there are often
a range of views to take account of
in our decision-making. The Board’s
engagement with our clients and
communities is primarily through our
Executive Directors and their teams,
where the Board receives reports
on such activities. The Board’s
engagement with our people and
our shareholders is much more direct.
As a Board we visited our Oslo office
in June 2023 and, later in the year,
I visited our Offshore and Renewables
Broking, Clarkson Port Services and
Gibb Group’s operations in Aberdeen.
It was satisfying to experience
firsthand the professionalism and
culture of Clarksons in these offices
and facilities. Our CEO spends a great
deal of his time travelling across the
regions in which the Group operates.
There is more detail on page 112
regarding Heike Truol’s global
activities as the Employee
Engagement Director.
The Board engages with our
shareholders throughout the year.
There is particular focus following
the announcement of our full and half
year results and with the programme
undertaken by Dr Tim Miller as Chair
of the Remuneration Committee and
myself prior to the AGM to ensure
our message on the strategic link
between our performance and
remuneration is understood.
Sustainability is on everyone’s
agenda and Clarksons is no exception.
The Board has continued its focus
on the development of our approach
to sustainability and, during 2023,
a materiality assessment was
undertaken. The results showed an
alignment of ESG and business priorities
with industry emissions rated as the
top priority. Given that our purpose
is to enable ‘smarter, cleaner global
trade’, this outcome was no surprise
and validated the Group’s focus
on the green transition where real
change can be facilitated. Developing
the ESG framework, pillars and goals
will remain a focus for the Board.
As shown throughout this Annual
Report, we have a high-performance
culture, and this is reflected in the
way we conduct ourselves as a
Board. We reported last year on our
externally facilitated Board evaluation,
which supported our view that the
Board operates effectively, and that
open and constructive challenge is
encouraged and well received. Our
evaluation for 2023 was conducted
internally by way of a questionnaire.
The output was positive with good
progress noted on the actions from
the prior year’s review. This included
the time spent both formally and
informally in discussing the Group’s
strategic direction and opportunities.
Under their Terms of Reference, the
Board Committees are responsible for
a number of the duties and obligations
of the Board and their effectiveness
was also evaluated as part of the
2023 internal review. The outcomes
are set out on page 118, and I thank
the Chair and members of each
Committee for their effective and
focused contributions.
We note the updated Code published
recently by the FRC, and in 2024 we
will be considering the actions to be
taken to ensure our readiness for this
becoming effective.
On behalf of the Board, I look forward
to welcoming you to our AGM which
will be held, as in previous years,
electronically by video webcast.
We believe that this provides a very
effective way of hearing your views
and answering any questions you
may have about the business of the
meeting. Our AGM will be held on
9 May 2024 at 12 noon.
Thank you to all our stakeholders
for your continued support this year.
Laurence Hollingworth
Chair
1 March 2024
Laurence Hollingworth
Chair
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Committee membership
Audit and Risk Committee
A
Nomination Committee
N
Remuneration Committee
R
Chair
2
1
1
3
3
2
2
5
Skills and expertise
Previously a senior leader in
investment banking, Laurence brings
significant capital markets experience
to Clarksons which positions him well
to guide the development of the
Financial business and wider strategy.
Laurence has a strong understanding
of broking and the relationship-led
environment in which Clarksons
operates, having been responsible
for client relationship management
with some of JP Morgan’s most
high-profile clients. This experience
gave him broad exposure to different
leadership styles and board dynamics,
developing the ideal skillset to provide
oversight and constructive challenge
in the boardroom.
Career experience
Laurence’s 37-year career in
stockbroking with Cazenove and
latterly JP Morgan saw him hold
several senior leadership roles
including Head of UK Investment
Banking, Head of EMEA Industry
Coverage and finally as Vice Chairman
for Equity Capital Markets EMEA.
Principal external appointments
– Chairman of ABM Communications
Limited
– Non-Executive Director of Atom
Bank plc
– Chairman of Molten Ventures plc
Appointed: July 2020
(and as Chair in March 2022)
Key areas of expertise:
Capital markets, investor relations,
strategy
Laurence Hollingworth
Chair
N
R
Board of Directors
Board diversity and independence
We recognise that diversity, in its broadest sense, is a key driver of an effective
board, leading to effective debate, challenge and decision-making.
Non-Executive Director tenure
As at 1 March 2024
0-3 years 1
3-6 years 4
6-9 years 0
Over 9 years 1
Gender
As at 1 March 2024
1
Male 5
Female 3
1 As at 31 December 2023 – male: 5, female 3.
Female representation in Senior
Board roles
1
As at 1 March 2024
Male 3
Female 1
1 As defined by Listing Rule 9.8.6(9) and
the FTSE Women Leaders Review as being
the Chair, Senior Independent Director,
CEO or CFO.
Age
As at 1 March 2024
50-59 3
60-69 4
70-79 1
Ethnicity
As at 1 March 2024
White 7
Mixed/multiple ethnic group 1
Independence
As at 1 March 2024
Non-Executive Chair 1
Independent 5
Executive 2
Listed company experience
Financial acumen
Strategy
Global business
Technology and IT
People and reward
Investment banking
Shipping/sector experience
Number of Non-Executive Directors (including the Chair) who are highly
experienced in that area
As at 1 March 2024
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Skills and expertise
Martine brings a wealth of knowledge
in electronic trading, risk management
and technology solutions. This
experience, together with her track
record of innovation, business growth
and client acquisition, make her ideally
placed to contribute to Clarksons’
strategy to grow its technology
business.
Career experience
Martine has over 25 years’ experience
in the financial services industry at
State Street, Morgan Stanley, JP Morgan
and Goldman Sachs. She is currently
the Executive Vice President, Head of
Global Markets for Europe, Middle East
and Africa (EMEA) as well as running
the electronic trading solutions within
State Street. Martine has significant
board experience across legal entities
in Europe, North America and Asia.
She studied business management at
Queensland University of Technology
in Brisbane, Australia.
Principal external appointments
– Executive Vice President, Head of
State Street Global Markets in EMEA
and Head of GlobalLink
Skills and expertise
Jeff‘s broad-based experience across
a number of disciplines makes him
ideally placed to perform the role
of Chief Financial Officer & Chief
Operating Officer. In addition to
his strong background in finance,
Jeff has an impressive track record
in managing and delivering across
broking, corporate finance, IT
implementation and software
development, HR and regulatory
compliance. His career has spanned
both publicly listed and private
companies, as well as regulated
industries. He is also the Board
member responsible for ESG matters
and the Chairman of Maritech, the
SaaS provider of the Sea platform.
Career experience
Before joining Clarksons, Jeff spent
13 years at the Gerrard Group PLC,
where he was a member of the executive
committee and Chief Operating
Officer of GNI. Jeff began his career
with KPMG LLP and is a Fellow of the
Institute of Chartered Accountants.
Principal external appointments
– Chair of The Clarkson Foundation
– Non-Executive Chair and Director
of the International Transport
Intermediaries Club Limited
– Senior Independent Director
and Chair of both the Remuneration
and Audit Committees of Lok’n
Store Group plc
Skills and expertise
Having worked in shipbroking his
entire career, Andi brings to the Board
extensive knowledge and experience
of global integrated shipping services.
He is recognised in the market as
an industry leader. His detailed
knowledge of Clarksons’ operations,
combined with his commitment to
drive the strategy, make him ideally
placed to inspire and lead the Group.
Career experience
Andi joined Clarksons in 2006 as
Managing Director of the Group’s
shipbroking services. His shipbroking
career began with C W Kellock & Co
and later the Eggar Forrester Group.
Prior to Clarksons, he was with
Braemar Seascope for 17 years.
Principal external appointments
None
Jeff Woyda
Chief Financial Officer
& Chief Operating Officer
Andi Case
Chief Executive Officer
Martine Bond
Independent
Non-Executive Director
Appointed: March 2021
Key areas of expertise:
Global business, strategy, technology
Appointed: June 2008
Key areas of expertise:
Global business, shipping/sector
experience, strategy
Appointed: November 2006
Key areas of expertise:
Finance, strategy, technology
A
R
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Sue Harris
Senior Independent Director
Appointed: October 2020
(and as Senior Independent Director
in September 2022)
Key areas of expertise:
Finance, listed company experience,
risk management
Dr Tim Miller
Independent
Non-Executive Director
Appointed: May 2018
Key areas of expertise:
Global business, people and reward,
listed company experience
Birger Nergaard
Independent
Non-Executive Director
Appointed: February 2015
Key areas of expertise:
Capital markets, strategy
Skills and expertise
Sue brings significant financial,
risk management and corporate
development experience to her role
at Clarksons, gained through senior
roles across listed companies in
financial services and retail. She has
extensive leadership and boardroom
experience, having held a number of
senior executive and non-executive
roles across a broad range of sectors.
Sue is a seasoned audit committee
chair, and a qualified chartered
management accountant.
Career experience
In addition to Sue’s current
non-executive roles, she was formerly
a Non-Executive Director of Abcam plc.
Sue previously chaired the Audit and
Assurance Council at the Financial
Reporting Council and was a
member of the Codes and Standards
Committee. She has held a number of
senior executive positions at FTSE 100
businesses, including as Divisional
Finance Director and Group Audit
Director for Lloyds Banking Group.
Prior to this, Sue held roles including
Managing Director for Finance at
Standard Life and Group Treasurer
and Head of Corporate Development
for Marks & Spencer.
Principal external appointments
– Non-Executive Director and Chair
of the Values and Ethics Committee
of The Co-operative Bank p.l.c.
– Non-Executive Director of The
Co-operative Bank Finance p.l.c.
– Non-Executive Director of The
Co-operative Bank Holdings Limited
– Non-Executive Director and Chair
of the Audit Committee of FNZ
(UK) Limited
– Non-Executive Director of Schroder
& Co. Limited and Chair of the Audit
and Risk Committee of the Wealth
Management Division
– Independent Director of Barclays
Pension Funds Trustees Limited
Skills and expertise
Dr Tim Miller has over 30 years’
experience working in large-scale
people businesses with significant
international operations. Whilst Tim
has extensive experience of HR and
remuneration matters gained in his
executive and non-executive career,
his executive roles also gave him
exposure across a broad remit
including compliance, audit,
assurance, financial crime, property
and legal. Tim has a proven track
record serving as a non-executive
director and remuneration committee
chair in listed companies. Together
with his HR background, this
experience is extremely relevant to
his role at Clarksons, which includes
the role of Chair of the Trustees of
the staff pension schemes.
Career experience
The majority of Tim’s executive
career was within regulated industries,
including roles at Glaxo Wellcome
and latterly Standard Chartered, with
global responsibility for a wide variety
of business services. He was
previously a Non-Executive Director
and Chair of the Remuneration
Committee at Michael Page Group plc,
Non-Executive Director and Chair of
the Remuneration Committee of Scapa
Group plc, Non-Executive Director and
Chair of the Remuneration Committee
at Equiniti Group plc, Non-Executive
Director at Equiniti Financial Services
Limited, and Non-Executive Director
at Otis Gold Corp.
Principal external appointments
None
Skills and expertise
Birger’s deep knowledge of capital
markets and investment banking
brings valuable expertise to Clarksons,
particularly in developing and
overseeing our banking strategy. He
has extensive knowledge of investing
in Nordic technology companies,
and is experienced in taking an active
role on the boards of these companies
to help position them for long-term
growth. Birger is therefore well
positioned to provide unique insight
into initiatives to innovate and develop
new services for clients.
Career experience
After establishing Four Seasons
Venture (today Verdane Capital) in
1985, Birger was the CEO until 2008.
Birger joined the board of RS Platou
ASA (now Clarksons Norway AS) as
Deputy Chairman in 2008. He joined
the board of Clarksons Securities AS
in 2010. Birger has remained as a
Director of these companies since
their acquisition by Clarksons.
In 2006, Birger was awarded King
Harald’s gold medal for pioneering the
Norwegian venture capital industry.
Principal external appointments
– Director of Verdane Capital GP ApS
– Director of Nergaard Investment
Partners AS
– Non-Executive Director of Union
Eiendomskapital Core AS
Board of Directors continued
A
N
A
R
N
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106 Clarkson PLC
2023 Annual Report
Heike Truol
Independent
Non-Executive Director
Appointed: January 2020
Key areas of expertise:
Global business, shipping/sector
experience, strategy
Skills and expertise
Heike has an in-depth knowledge
of the dry bulk market and as a result
she is well positioned to bring valuable
client perspectives to her role. With a
20-year track record of both advising
large global organisations from the
outside as a management consultant
as well as driving performance from
within, Heike brings significant
experience of strategy development
and delivery to the Board. Heike
serves as Clarksons’ Employee
Engagement Director.
Career experience
Heike was appointed as the
Chief Strategy Officer for ALS Global,
a global leader in providing testing
solutions to clients in a wide range
of industries, in November 2023. She
was previously the Chief Commercial
Officer for MineHub Technologies.
Prior to that, she gained 11 years’
experience at Anglo American where
she was Executive Head, Commercial
Services until April 2020. On joining in
2009 as Group Head of Strategy she
helped evolve the strategy function
working closely with the CEO and
executive committee. Heike later
helped establish the Marketing
business and had P&L responsibility
for Anglo American’s global shipping
activity. Prior to Anglo American,
Heike was a management consultant
and held roles at Marakon Associates
and Deloitte.
Principal external appointments
– Chief Strategy Officer for ALS Global
Statement of compliance with the
UK Corporate Governance Code
(the ‘Code’)
The Company complied with the
principles and provisions of the Code
during the year ended 31 December
2023 with the exception of the
provision noted to the right where
we have provided an explanation.
The Code is available at
www.frc.org.uk
Provision 38 (alignment of pension
contribution rates for executive
directors with those available
to the workforce)
The Executive Directors receive a cash
supplement in lieu of pension. Whilst
not aligned with the contribution rates
for the wider workforce for contractual
reasons, the Company has undertaken
to align this with that available to the
majority of the wider workforce in the
UK (or any other country in which the
executive is based) when any new
Executive Director is recruited.
Code compliance
Section of Code and how we comply Page
Committee membership
Audit and Risk Committee
A
Nomination Committee
N
Remuneration Committee
R
Chair
A
N
Board leadership and company purpose
– Governance at a glance 102
– Chair’s introduction to Corporate Governance Report 103
– Board of Directors 104
– Governance framework 108
– An effective Board 110
– Purpose, values, behaviours and culture 110
– Governance arrangements and Board resources 112
– Conflicts of interest 112
– Stakeholder engagement 112
Division of responsibilities
– The roles of individual Directors 108
Composition, succession and evaluation
– Nomination Committee Report 114
– Succession planning and Board appointments 116
– Election and re-election of Directors 117
– Board and Committee effectiveness 118
– Diversity 119
– Induction 119
– Development 119
Audit, risk and internal control
– Audit and Risk Committee Report 120
– Financial reporting, including fair, balanced
and understandable assessment 122
– External audit 123
– Internal controls and risk management 125
– Going concern 126
– Viability statement 126
– Compliance 127
– Internal audit 127
Remuneration
– Remuneration Committee – at a glance 128
– Annual statement – Remuneration Committee Chair 129
– Annual Report on Remuneration 132
– Appendix: Directors’ Remuneration Policy 142
107Clarkson PLC
2023 Annual Report
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Other
information
Corporate Governance Report
Chair
– Leads the Board, facilitating the
contribution of all Directors and
promoting an open and constructive
relationship between the Executive
and Non-Executive Directors
– Ensures the effectiveness
of the Board
– Oversees the development of the
Group’s purpose, values and culture
– Promotes high standards of
corporate governance
– Available to shareholders and
fosters dialogue with other
key stakeholders
Chief Executive Officer
– Responsible for the day-to-day
management of the Group
– Develops the strategy and
commercial objectives for approval
by the Board, and leads the
management in delivering them
within the risk appetite approved
by the Board
– Promotes the embedding of
the Group’s culture throughout
the organisation
– Leads the relationship with
institutional investors and
other stakeholders
Chief Financial Officer & Chief
Operating Officer
– Manages the Group’s financial
and operational affairs and supports
the CEO in the management of
the Group
– Alongside the CEO, represents the
Group in meetings with institutional
shareholders and other stakeholders
– In conjunction with the CEO, takes
responsibility for overseeing all
ESG matters
Senior Independent Director (‘SID’)
– Acts as a sounding board for the
Chair and leads the evaluation of
his performance
– Serves as a trusted intermediary
for other Non-Executive Directors
– Available to shareholders,
particularly when their concerns
have not been resolved through
other channels
Independent Non-Executive Directors
– Contribute to the development
of the strategy and scrutinise
its execution by management
– Provide both objective and
constructive challenge and support
to the development of Board
proposals and the performance
of management
– Monitor management’s progress
against agreed performance
objectives
Employee Engagement Director
– Facilitates two-way communication
between the Board and the
workforce through a programme
of engagement initiatives
– Enhances the voice of the workforce
by feeding their views into the
Board’s decision-making process
Group Company Secretary
– Acts as point of contact for
the Chair and Non-Executive
Directors, and facilitates the
induction of new Non-Executive
Directors
– Facilitates information flows
between the Board and its
Committees, and between
management and the Board
– Advises the Board on all
corporate governance matters
and ensures good corporate
governance practices
throughout the Group
Our governance framework is the
key to ensuring that our business is
run in the right way for the benefit
of all of our stakeholders.
Board
Key matters reserved
for the Board:
– Purpose
– Strategy
– Setting the Group’s culture,
standards and values
– Internal controls and risk
management
– Financial reporting and viability
– Capital and liquidity
– Board and Committee
appointments
– Corporate governance matters
– ESG and stakeholder matters
– Material contracts
Individual roles and activities:
108 Clarkson PLC
2023 Annual Report
We discharge some of our
responsibilities through delegation
to Board Committees. The Board
Committees bring an increased focus
on key areas and explore them more
deeply, thereby gaining a greater
understanding of the detail. The Chair
of each Board Committee reports
to the Board on their activities
following meetings.
Any delegation of authorities to Board
Committees is formally documented
in writing through Terms of Reference,
while the Board maintains a schedule
of key matters which are reserved for
the Board’s decision. Furthermore,
there is a clear division of
responsibilities between the Chair and
the CEO. The execution of the strategy
and the day-to-day management of
the Group and operational matters
are delegated to the CEO.
The Group’s executive governance
structure maximises the opportunity
for all parts of the business to have
clarity on their goals and successfully
execute on divisional and Group
strategic plans.
Click to read more:
The schedule of Matters Reserved for the
Board; the Terms of Reference of the Board
Committees; and the roles of the Chair, CEO,
SID and Employee Engagement Director are
available at www.clarksons.com/home/
investors/corporate-governance
Read more:
How we assess the independence of our
Non-Executive Directors on page 117.
Read more:
On pages 114 to 119.
Read more:
On pages 120 to 127.
Read more:
On pages 128 to 144.
Executive Team
– Assists the CEO and CFO & COO in running
the business and delivering the strategy
– Develops and implements strategy and goals,
operational plans, procedures and budgets,
and monitors business performance
(including competitive pressures)
– Oversees the assessment and control of risk
Nomination Committee
– Reviews the effectiveness of the Board, and
its structure, size, composition and diversity
– Leads succession planning for the Board
and oversees succession plans for senior
management
Audit and Risk Committee
– Monitors the integrity of the financial reporting
for the Group and manages the relationship
with the External Auditor
– Oversees the effectiveness of the risk
management and internal control systems
Remuneration Committee
– Sets the remuneration policy and packages
for the Executive Directors and other members
of the senior management team, whilst having
regard to pay across the Group
– Approves the remuneration of the Chair
109Clarkson PLC
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Other
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Corporate Governance Report continued
An effective Board to promote
the long-term success of the Group
The Board is accountable to shareholders
for the creation of sustainable value,
and to other stakeholders for the
wider impact that we have. We have
overall responsibility for leading the
Group and are the decision-making
body for matters which are significant
to the Group as a whole, in particular
strategic and financial matters, and
those which could have a material
reputational impact.
Our ability to meet our responsibilities
is underpinned by having in place a
balanced and effective Board, and our
governance framework which enables
effective decision-making within a
structure of clear accountabilities. You
can read more about our governance
framework and individual roles and
responsibilities on pages 108 and 109.
The Chair promotes an open and
honest boardroom culture which
ensures that the range of diverse skills,
experience and perspectives brought
collectively by the Non-Executive
Directors can be utilised effectively.
The boardroom is both supportive
and challenging, and enables the
Non-Executive Directors to bring
independent oversight to strategic
debates and contribute to the
continued development of
a sustainable strategy.
A Board strategy session is held
annually at which the Executive
Directors and members of the senior
management team present their views
of the market and forward view of the
opportunities and challenges for each
division. In developing the strategy,
the Board takes account of, not only
our obligations to shareholders, but
also the considerable impact that
the Group has on other stakeholders
including our people, clients, the
wider shipping community and the
communities in which we operate.
The Board monitors the implementation
of the strategy through regular updates
at Board meetings on key initiatives as
they progress. This also enables us to
regularly review whether the strategy
remains appropriate. The need to
deliver the strategy within the Group’s
risk appetite, and ensuring that the
Group has the appropriate resources,
skills and competencies to achieve
the strategy responsibly, are also
key areas of focus.
The effectiveness of the Board is
reviewed at least annually. You can
read more about this year’s Board
and Committee effectiveness review
on page 118.
Purpose, values, behaviours
and culture
Our purpose communicates our
strategic direction to our people,
clients and wider stakeholders, and
underpins everything that we do. Our
values articulate the qualities that we
embody and, to ensure the continued
growth of a sustainable business, our
values must remain at the core of the
way we behave. Our behaviours set out
clearly what is expected of all of our
people to thrive and perform in our
culture and act in line with our values.
This is the foundation of our culture.
Our values represent our current
and future aspirations for the business:
to ensure we remain dedicated to
excellence and retain our place as
the world-leading strategic advisor to
our clients. We believe our behaviours
accurately reflect our expectations
of our people, and provide clarity
regarding the commercial and
leadership requirements to deliver
our purpose.
Our people are the driving force of our
company, and we are committed to a
diverse and inclusive workplace where
we prioritise their health, wellbeing
and development. Our greatest
strength is the spirit of progressive
and energetic teamwork and
collaboration that underpins our
success. Our people processes are
designed to retain and empower
our employees to drive the business
forward, keep our clients at the core
of our activities and align our interests
with those of our stakeholders.
The Board has responsibility for
setting and overseeing our culture.
It sets the tone from the top and
reinforces this through all of its
actions, including its decisions
and own conduct.
Read more:
How our purpose, values and behaviours
are aligned with how we create value for
stakeholders on pages 22 and 23.
110 Clarkson PLC
2023 Annual Report
Element Overview Board and Committee oversight
Leading
by example
The Board sets the tone from the top. The Directors, Executive Team and senior
management lead by example through
all actions, reinforced through leadership
forums such as our Global MDs Week
and Executive Team meetings.
Performance
metrics
The Board reviews a broad range of performance metrics
that support our culture, including global turnover by
business sector and location, annual promotions to
early-, middle- and senior-level management positions,
employee engagement outcomes, key remuneration
frameworks and employee equity participation.
The performance metrics support the
Board in its role in monitoring and
assessing our culture.
Employee
voice
We promote an open and honest environment in which
our people are encouraged to share their views on a
variety of priorities and topics. Employees are invited to
a number of communication forums throughout the year,
including the Employee Voice Forum, chaired by our
Employee Engagement Director. Employees may also
be invited to present to the Board on relevant matters.
There are independent whistleblowing processes
in place which allow reporting of wrongdoing
on an anonymous basis.
Themes and discussion points from
communication forums are reported
to the Executive Team and Board,
providing key insights. The Board also
recognises the benefit of having direct
access to our people through a number
of direct lines of engagement and broad
employee social events.
Whistleblowing reports are investigated
appropriately and reported to the Board.
Policies, pay,
diversity and
inclusion
We pay for performance and seek to ensure that
the financial and non-financial rewards we give our
employees are competitive and support attraction
to the Company, engagement and retention.
Our people are the driving force of our company,
and we are committed to a diverse and inclusive
workplace where we prioritise their health, wellbeing
and development.
The Remuneration Committee oversees
remuneration policy across the Group and
reviews annually the remuneration trends
across the Group.
The Nomination Committee regularly
reviews our Group Diversity and Inclusion
Policy and receives updates on relevant
initiatives to promote a diverse and
inclusive workplace. The Remuneration
Committee also reviews annually our
Gender Pay Gap Report.
Risk
management
Our internal controls and risk management systems
are integral to the delivery of our strategy in a safe
and sustainable way. They translate into our day-to-day
risk culture.
The Audit and Risk Committee reviews
internal controls and risk management
systems, including risk appetite, as well
as internal audit reports that include an
evaluation of management approach.
The way we
do business
Our Compliance Code is reissued to employees annually
– it sets out the policies and standards we expect them
to uphold to meet our objective of conducting our
business in an ethical, honest and professional manner
wherever we operate. Employees are also required to
complete annual online training modules on a range
of areas covered by the Compliance Code.
Key policies are reserved for the Board’s
approval.
The Audit and Risk Committee receives
updates on compliance with policies
and completion of online training.
Health
and safety
Our priority is to provide a safe and secure workplace
for all, and we have policies and procedures in place
to support this.
Whilst we view the majority of our
activities as low risk, the Board monitors
the health and safety culture through
regular reporting.
The key elements of our culture
Our open and honest boardroom culture
sets the tone from the top and is cascaded
down throughout the whole Group.
111Clarkson PLC
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Other
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Corporate Governance Report continued
Governance arrangements
and Board resources
An annual programme of agenda
items is drafted for the Board prior to
the start of the financial year. Agendas
are driven by key strategic priorities,
the schedule of Matters Reserved for
the Board and the financial calendar.
The programme is flexed as necessary
to take account of changes in priorities
and external developments. The
process for agreeing the agendas
is managed by the Group Company
Secretary in consultation with the
Chair. A similar process is followed
for each Board Committee.
The Chair and the Group Company
Secretary ensure that the Directors
receive clear and timely information,
with Board and Committee papers
being circulated in advance of meetings
via a secure electronic portal. Should
any urgent matters arise between
scheduled meetings, Directors are
briefed either individually or through
a Board call. Directors can seek
additional information from
management at any time, whether
in relation to papers submitted for
discussion at a formal meeting or
any other matters. This allows them to
explore significant items in more depth
and signal areas where more detail
will be required when the matters are
discussed formally. These sessions also
provide the Non-Executive Directors
with an opportunity to engage with
management in a more informal way.
Attendance at Board meetings is set
out on page 102. If a Director is unable
to join a meeting, they are encouraged
to provide comments to the Chair in
advance on the business of the
meeting so that their views can be
taken into account as part of the
debate at the meeting.
The Chair regularly meets with the
Non-Executive Directors without the
Executive Directors present, both
collectively and individually. The SID
also meets with the Non-Executive
Directors at least once per year to
discuss the Chair’s performance.
All Directors have access to the advice
of the Group Company Secretary and,
in appropriate circumstances, may
obtain independent advice at the
Company’s expense.
Conflicts of interest
Directors are required to disclose
any interests that could give rise to
a conflict of interest either prior to
appointment or as and when they
arise. Potential conflicts may be
approved by the Board if it is satisfied
that it is appropriate to do so, but the
Director who has the potential conflict
cannot be counted in the quorum
when the conflict is discussed. The
Board may impose conditions on the
authorisation of a conflict, for example
that the Director should leave the
boardroom when certain matters are
discussed. Once authorised, a conflict
is recorded in the Register of Directors’
Conflicts. The Nomination Committee
is responsible for providing the Board
with guidance on the treatment of
Directors’ conflicts and for conducting
an annual review of the Register of
Directors’ Conflicts.
During the year, the Board considered
proposals that Heike Truol be appointed
as Chief Strategy Officer of ALS Global,
and that Laurence Hollingworth be
appointed as a non-executive director
of Molten Ventures plc and chair of
the board of directors. The Board
was satisfied that neither of these
appointments would give rise to a
conflict of interest and approved them.
Stakeholder engagement
We are committed to effective
engagement with our stakeholders
and gather feedback and input from
them through a variety of approaches.
The Board engages directly with our
people and our shareholders. In the
case of engagement with clients and
communities (who we have also
identified as key stakeholders),
management engagement is used
to form proposals at a business level,
with the Board being kept updated
in various ways.
Where relevant, stakeholder
considerations are also set out in Board
papers. You can read more about our
stakeholders on pages 58 and 59, and
how we have taken them into account
in meeting our responsibilities under
section 172 of the Companies Act 2006
on pages 60 to 63.
Information flow to Board
The Chair takes responsibility for
ensuring that the views of shareholders
are communicated to the Board as
a whole.
The CEO and CFO & COO regularly
update the Board on shareholders’
views, which reflects both their own
direct engagement with investors
and feedback from the Company’s
joint corporate brokers and financial
public relations advisor. The Chair
and Non-Executive Directors also
share the views and feedback from
shareholders following any meetings
they have attended.
An analysis of movements in the
shareholder register and trading
volumes, along with any broker
feedback, is provided to each Board
meeting, supplemented where
necessary by attendance of the joint
corporate brokers at Board meetings.
Analyst reports on the Company are
made available to all Directors through
the Board portal in order to enhance
their understanding of how the
Company is perceived in the market.
Our people
Our Employee Voice Forum
encourages two-way communication
between employees from various
divisions across the business and our
Non-Executive Directors. It is chaired
by Heike Truol, our Employee
Engagement Director. Heike assumed
this role from September 2022, but
had already attended Employee Voice
Forum meetings for over a year prior to
this. Participating employees are given
the opportunity to raise any issues,
including regarding remuneration,
that they deem relevant or appropriate.
In 2023, topics discussed included
ESG, technology and compliance in
shipping markets, being part of the
global group, and communication
methods and channels. During the
year, the Employee Voice Forum aimed
to ensure a global input into Board
engagement and Heike held meetings
in Singapore, Oslo and Houston.
We also provide as many
opportunities as possible for our
Non-Executive Directors to meet
a broad cross-section of our people
at social and networking events
throughout the year which provides
a further opportunity for engagement
on key topics. This includes attendance
at our annual Global MDs Week, at
which the Non-Executive Directors
are invited to join various sessions and
events. This gives them the opportunity
to hear firsthand the views of our
senior employees and gain an insight
into our day-to-day culture.
We have a section of our internal
communications channel (‘Voyage’)
dedicated to inviting engagement
with our global workforce via email.
This allows our people to correspond
directly with our Non-Executive
Directors or arrange to speak
to them on any topic.
The Non-Executive Directors also
receive regular updates from the
Executive Directors and other
executives on their own engagement
with employees, for example through
site visits, talent activities and town
hall meetings.
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Our shareholders
The Board is cognisant of its responsibility to manage the Company on behalf of our shareholders, and we understand
that maintaining strong relationships and an open dialogue with investors underpins the long-term success of the Company.
The Chair is responsible for ensuring effective communication with shareholders and the Chair, SID and all Non-Executive
Directors are available to attend meetings if requested by shareholders.
Institutional investors Retail shareholders Employee shareholders
Who they are
Large institutional investors
such as investment managers
and pension funds
Who they are
Private investors holding around
6% of the issued share capital
(excluding employee shareholders)
Who they are
Employees holding around 10% of
the Company’s issued share capital,
either through direct interests or
through restricted shares granted
under employee share plans
Who engages with them
– The CEO and CFO & COO
are the primary contacts for
institutional investors
– They engage actively with both
current and potential investors
Who engages with them
– The Board through attendance
at the AGM
– Our Company Secretariat team and
our registrar (Computershare) are
available to help retail shareholders
with any queries
Who engages with them
– Employee shareholders (and the
workforce as a whole) are kept
informed by the Executive Directors
and the Group Company Secretary
of publicly available financial
updates and governance changes
such as new Director appointments
Engagement in 2023
– The Chair met with 13 shareholders
ahead of the 2023 AGM in order
to understand their views on the
Company and its strategy, and
to engage with them regarding
remuneration outcomes and other
governance matters such as
environmental matters, succession
planning and diversity
– A further four meetings were held
with shareholders following the AGM
– The Remuneration Committee Chair
also joined some of the meetings
– The CEO and CFO & COO held
over 90 meetings with both
potential and current investors
(holding over 35% of the issued
share capital) to gain an
understanding of their views
and concerns
Engagement in 2023
– Achieved principally through
our website and the AGM
– Full year and half year results
announcements, the Annual Report
and results presentations are all
available on our website, as well
as information regarding share
price performance and
governance matters
Engagement in 2023
– The Company issues an annual
invitation to employees in the UK
and our largest overseas locations
to join a ShareSave plan (or similar
local equivalent), which gives
employees the opportunity to
purchase shares in the Company
at a discounted price
– The Board is extremely supportive
of widening global participation in
ShareSave or the local equivalent,
which has been offered in six
overseas countries to date
– Over 70% of our global employees
have been invited to join ShareSave
or the local equivalent, and over
30% of eligible employees took
up an invitation to participate
during the year
Annual General Meeting
We view the AGM as an opportunity to engage directly with our shareholders on the key issues facing the Group and
to respond to any questions shareholders may have on the business of the meeting. The Notice of Meeting is circulated
to shareholders at least 20 working days prior to the meeting. All resolutions proposed to the meeting are voted on by
way of a poll. The number of proxies received is disclosed to shareholders in attendance at the meeting, and the voting
results are announced to the London Stock Exchange and made available on the Company’s website as soon as
practicable after the meeting.
The 2023 AGM was held on 11 May 2023. The meeting was held electronically by video webcast, as was permitted under
the Company’s Articles of Association. Votes were cast in relation to circa 75% of the issued share capital and, although
all resolutions were passed by the required majority, the Board noted a significant vote against resolution 2 to approve the
Directors’ Remuneration Report, resolution 3 to approve the Directors’ Remuneration Policy and resolution 10 to re-elect
Dr Tim Miller (Chair of the Remuneration Committee) as a Director. Further detail regarding the actions taken by the
Board in response to this outcome can be found in the Directors’ Remuneration Report on pages 129 to 131.
We are pleased to confirm our intention to hold this year’s AGM electronically by video webcast at 12 noon on Thursday
9 May 2024. Full details of the resolutions to be proposed at the meeting are set out in the Notice of Meeting. The Chair,
as well as the Chairs of the Board Committees, will be in attendance at the meeting to answer questions on the business
of the meeting.
113Clarkson PLC
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Other
information
How the Nomination Committee spent its time
1. Annual effectiveness review
Review of actions arising from the 2022
review and agreeing the approach to the
2023 review.
2. Appointment/reappointment
of Directors
Matters relating to the annual re-election
of Directors.
3. Diversity, Equity and Inclusion
Updates on ongoing initiatives to
promote DEI in the Group.
Meeting attendance
Meetings
Laurence Hollingworth (Chair) 2/2
Sue Harris 2/2
Birger Nergaard
1
1/2
Heike Truol 2/2
1 Unable to attend one meeting due to illness. The Chair ensured that there was an
opportunity for Birger to provide comments on the business of the meeting in advance.
4. Governance
Various matters including the annual
review of the Nomination Committee’s
effectiveness and of its Terms of
Reference.
5. Succession planning
Review of plans and activities regarding
non-executive, executive and senior
management succession planning.
Committee highlights in 2023
Significance Progress
Diversity, Equity and Inclusion
(‘DEI’)
Read more:
On page 119.
Our people are the driving force of
our company, and we are committed
to a diverse and inclusive workplace
where we prioritise their health,
wellbeing and development.
The Nomination Committee
devoted a significant amount of time
to reviewing DEI initiatives around
recruitment, affording all employees
the same career opportunities,
ensuring our people feel part of
the Clarksons global community,
and improving our understanding
of our workforce through data
capture and analytics.
NED succession planning
Read more:
On page 116.
Ensuring that the Board has the
right balance of skills and experience
is key to our ability to continue to
deliver our strategy. Through our
annual review of the balance of skills,
knowledge, experience and diversity
on the Board, further skills and
experience that would be beneficial
were identified.
The Nomination Committee
recommended to the Board that
a new independent non-executive
director with these skills be sought.
A search process was initiated.
Annual effectiveness review 21%
Appointment/reappointment
of Directors
11%
Diversity, Equity and Inclusion 31%
Governance 21%
Succession planning 16%
Nomination Committee Report
At a glance
114 Clarkson PLC
2023 Annual Report
I am pleased to present this report
on the work of the Nomination
Committee over 2023.
The key objectives of this Committee
are to ensure the Board comprises the
right combination of skills, knowledge,
experience and diversity to maintain
a high degree of effectiveness in
discharging its responsibilities and
to review the development of future
leaders to ensure there is a talent
pipeline to meet the long-term
strategic objectives.
These objectives are achieved in a
number of ways. In line with the Code
requirements, we have undertaken an
internal evaluation of the Board, its
three Committees and each Director.
This provides a formal means of
evaluating areas of the Board and
Committees’ effectiveness and
supports the ongoing, informal
conversations and relevant training
sessions held during the year to ensure
all Board members are kept up to
date and well informed about both
internal and relevant external matters.
The Committee regularly reviews
our Board skills matrix as part of
discussions regarding non-executive
director succession plans. Further
skills were identified during the year
that would be beneficial to the Board
and a search for a new non-executive
director was initiated.
Birger Nergaard reached his nine-year
tenure in February 2024. He agreed
to remain on the Board for a short
period until the AGM, where he will
not be standing for re-election. After
discussion, the Committee agreed
that Birger remained independent
notwithstanding the length of
his tenure.
As referred to earlier, executive
succession planning and the
identification of the future talent
pipeline has remained a key priority
for the Committee. The loss of key
personnel remains a real and
continuing focus for the Executive
Directors and senior management.
The CEO provides regular updates
to the Board on both the risk and the
actions being taken to develop talent
internally and retain key personnel,
and how this might impact on our
executive succession plans. The Our
impact section includes more details
of the initiatives and actions being
taken regarding talent management,
promotion, recognition and reward
(see pages 84 and 85).
As a Board we remain mindful of
the benefits of being a diverse and
inclusive employer and are committed
to fostering a workplace where all of
our employees can thrive and feel
valued and included. Whilst shipping
has traditionally been a male-dominated
industry, we are undertaking a number
of initiatives to facilitate change over
the whole employee experience and
the Board was proud to support the
launch of the Global Trainee Broker
Programme in September 2023 which
resulted in a female uptake of 39% –
a small but very tangible and important
step on the journey to attract, over
time, a more diverse workforce and
ultimately deliver change.
The FCA’s policy statement on ‘diversity
and inclusion on company boards
and executive management’ applied
to Clarksons for the first time for the
year ended 31 December 2023, and
is aligned with the recommendations
in the FTSE Women Leaders Review.
We have met the target for at least
one of the senior Board positions
to be a woman and for at least one
member of the Board to be from an
ethnic minority background. Three
of our eight Directors are women
(comprising 37% of the Board). We
remain committed to a diverse Board
and will continue to regularly review
our Board composition to ensure we
retain a balance of skills, knowledge
and experience. Whilst acknowledging
the 40% target for women on boards
in the FTSE Women Leaders Review
and the Listing Rules, and noting the
need for a diverse list of candidates
in the search for any new director,
our policy will continue to be one
of selecting candidates with an
appropriate mix of skills, knowledge
and experience to ensure the
continued success of the business.
Laurence Hollingworth
Nomination Committee Chair
1 March 2024
Laurence Hollingworth
Nomination Committee Chair
A diverse
Board to ensure
long-term success
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Succession planning
Non-Executive Directors
The Nomination Committee
reviews succession planning for the
Non-Executive Directors. Whilst the
tenure of the Directors is an important
factor, the Nomination Committee is
cognisant that this cannot be reviewed
in isolation. Non-Executive Director
succession planning is therefore
considered within a wider context
which includes the size, structure
and composition of the Board; the
current balance of skills, knowledge,
experience and diversity on the Board
and whether it is appropriate to
continue to challenge management
and support the delivery of the
Group’s strategy; provisions under
the Code regarding Board Committee
composition; and the benefits of
refreshing the membership of the
Board Committees.
Having reviewed the factors listed
above, and taking account of feedback
from the effectiveness evaluation
of the Board undertaken in 2023,
the Nomination Committee drew the
following conclusions during the year:
– The tenure of the Directors (which
is set out on page 104) does not
give rise to any immediate concerns
as four of the six Non-Executive
Directors in office as at the date
of this report are in their second
three-year term. Furthermore, as
Birger Nergaard would not be seeking
re-election at the 2024 AGM (having
served nine years on the Board),
the search for a new Non-Executive
Director had been initiated.
– The size of the Board is conducive
to an effective debate, being large
enough to bring a broad and diverse
range of backgrounds, perspectives
and experiences, but not so large as
to be unwieldy. The structure of the
Board remains appropriate.
– Whilst the collective skills and
experience of the Non-Executive
Directors and the Board as a whole
remained aligned with the Group’s
operations and strategy, further
skills were identified during the
year that would be beneficial to
the Board. A search for a new
non-executive director had
therefore been commenced.
– The Hampton-Alexander Review
target of at least 33% female
representation on the Board had
been met, as had the target for
ethnic diversity set out in the
Parker Review. In addition, the
recommendation under the FTSE
Women Leaders Review to have
at least one woman in a senior
Board role was met through the
appointment of Sue Harris as SID.
The Nomination Committee remains
cognisant of the target for 40%
female representation by the end
of 2025, and the need for a diverse
list of candidates in the search for
a new non-executive director had
been noted.
– The Company complies with all
provisions under the Code in relation
to Board Committee memberships.
Sue Harris is a chartered
management accountant and has a
broad range of experience in senior
finance roles. The Board therefore
considers her to meet the
requirement under the Code that
at least one member of the Audit
and Risk Committee has recent
and relevant financial experience.
The Audit and Risk Committee as
a whole has competence relevant
to the sector in which the Company
operates. Furthermore, Dr Tim Miller
has extensive HR and remuneration
knowledge from his executive
career. He has recently served on
(and chaired) the remuneration
committee of other organisations
and therefore has recent and relevant
experience of remuneration matters.
In addition to this longer-term view,
the Nomination Committee has also
considered succession planning across
a short-term horizon. It was satisfied
that, in the event that one of the Board
Committee Chairs was unexpectedly
unable to fulfil their duties, the current
Board composition would allow
contingency cover to be identified and
the Board Committee to continue to
operate effectively whilst still meeting
any specific Code requirements.
Chair
To ensure that an effective Chair is
in place at all times to lead the Board,
and that the Board would be able to
act quickly when a search for a new
Chair needed to be undertaken in
the future, the Nomination Committee
has established a framework for Chair
succession. This outlines the process
to be followed, as well as confirming
any arrangements to be implemented
at short notice in the event of the
Chair being temporarily absent.
Executive positions
and senior management
Through the Nomination Committee,
the Board has remained close to
discussions on executive and senior
management succession planning.
During the year, updates were
received on completed and planned
succession management actions, as
well as ongoing initiatives and plans.
This included the annual promotions
process in action, which utilises a
framework to assess, promote and
develop our future leaders on a
consistent basis and secure the
pipeline of key talent for succession to
more senior roles. The opportunity to
develop as senior leaders is enhanced
by the participation of our people in
divisional management forums,
management offsites, and attendance
at our global strategy-setting meetings
at the start of each year. Our key
objective and focus is to ensure that
our people become our future leaders.
We create an environment in which
our people have broad experience,
collaborate across our business and
participate in the running of their
respective businesses to gain
exposure to leadership responsibilities.
We augment internal succession with
key external strategic hires where
appropriate and always monitor the
external market for the best talent.
Emergency succession plans are in
place for the Executive Team and other
key senior management positions.
The Nomination Committee remains
satisfied that this approach is
appropriate to continue to develop the
right skills and capabilities in the levels
below the Board, retain and develop
key talent, and to mitigate risk.
Nomination Committee Report continued
116 Clarkson PLC
2023 Annual Report
Board appointments
The Nomination Committee
is responsible for making
recommendations to the Board
regarding appointments of new
Directors and membership of Board
Committees, as well as reviewing
the reappointment of Directors
at the end of their three-year terms.
During the year, the Nomination
Committee made recommendations
to the Board to reappoint Sue Harris
and Heike Truol for a further
three-year term. In addition, the Board
agreed to extend Birger Nergaard’s
appointment for a short period beyond
his nine-year tenure. Birger will not
seek re-election at the 2024 AGM.
The Board is satisfied that Birger
remains independent notwithstanding
the length of his tenure.
Election and re-election of Directors
The Code sets out that all Directors
should offer themselves for election by
shareholders at the first AGM following
their appointment, and for re-election
on an annual basis thereafter.
The Nomination Committee leads
the process for evaluating whether the
Board should recommend the election/
re-election of Directors to shareholders.
In forming a recommendation to the
Board, it takes account of the
contribution to the Group’s strategy,
performance, time commitment and
independence of each Non-Executive
Director. The appraisals of the Executive
Directors are also considered by the
Board prior to their re-election
being recommended.
Contribution to strategy
The contribution that each Director
makes to the Group’s strategy is set out
in their biographies on pages 104 to 107.
Director performance evaluations
The process by which the performance
of the Directors is evaluated is set out
on page 118. The evaluations concluded
that each of the Directors continues to
perform effectively and to demonstrate
commitment to their role.
Time commitment
Although the letter of appointment of
each Non-Executive Director includes
an anticipated time commitment, the
letter also states that Directors are
expected to commit sufficient time
to their directorship to discharge their
obligations to the Company. The
Nomination Committee reviewed the
time that each Non-Executive Director
commits to the Company and was
satisfied that this was sufficient to
discharge their duties fully and
effectively in each case.
The Nomination Committee also
considered the external directorships
and other commitments of each
Director. The following points
were noted:
– Laurence Hollingworth’s time
commitments had been revisited
by the Nomination Committee ahead
of recommending his appointment
as Chair to the Board, and it was
confirmed that there were no
concerns that he would not be able
to devote sufficient time to the role.
During the year, Laurence advised
the Board that he would be appointed
as a non-executive director of
Molten Ventures plc and chair of the
board of directors. The Board was
satisfied that Laurence would still
be able to devote sufficient time
to his role at the Company.
– The time commitment required
of Sue Harris in respect of her other
directorships had been evaluated
closely at the time of her
appointment, and the Nomination
Committee had satisfied itself that
Sue would be able to devote
sufficient time to her directorship
at the Company. The Nomination
Committee revisited this assessment
prior to recommending her
appointment as SID to the Board,
noting that there had not been any
changes in Sue’s time commitments
since her appointment. Moreover,
since her appointment to the Board,
Sue had demonstrated an
appropriate time commitment
to her duties to the Company.
– Heike Truol had been appointed
as Chief Strategy Officer for ALS
Global during the year. The Board
was satisfied that this would not
impinge on Heike’s ability to devote
sufficient time to her directorship
at the Company.
Following this review, the Nomination
Committee confirmed that the external
directorships and time commitments
of the Directors did not give rise to
any concerns that each Director was
not able to commit sufficient time to
their directorship at the Company.
Independence
The Nomination Committee assesses
the independence of the Non-Executive
Directors against the criteria set out
in the Code. This highlights that to be
classed as independent, non-executive
directors should be independent in
character and judgement and free
from any relationships or
circumstances which may affect
that judgement. The Nomination
Committee assesses independence
annually prior to recommending the
election/re-election of the Directors.
However, the Nomination Committee
also revisits its assessment as and
when there are any changes in
circumstances and prior to
recommending any reappointments
for a further term to the Board.
During its annual assessment, the
Nomination Committee satisfied itself
that there had not been any changes
in circumstances which would
impact on the previous assessment
that all Non-Executive Directors
were independent.
Conclusion
The Board approved the Nomination
Committee’s recommendation that
each Director (other than Birger
Nergaard) should be proposed for
re-election at the 2024 AGM. Further
information about the Directors, which
highlights their skills and areas of
expertise, is set out on pages 104 to 107.
117Clarkson PLC
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Nomination Committee Report continued
Outcome
The Board review highlighted
the constructive and productive
dynamics in the boardroom, whilst
also indicating the need to enhance
some of the skills present (as is already
an area of focus within the search
for a new non-executive director).
The review also highlighted the benefit
obtained from recent opportunities
for more informal Board interaction,
and it was agreed that these should
be continued. Business presentations
through the year were also viewed as
extremely useful and should therefore
remain a feature of the 2024 Board
calendar. The strategic planning and
review process should also continue
to be refined.
The Board Committees were
confirmed to be operating effectively,
and fulfilling their Terms of Reference.
Nomination Committee members
highlighted the importance of
maintaining the focus on succession
planning and scheduling in an
appropriate amount of time for this in
2024. The Nomination Committee was
also cognisant of ensuring the right
skill-set in the non-executive director
to be appointed within the current
search process. The Audit and Risk
Committee noted the need to remain
up to date with developments around
ESG matters and risks in relation to
cyber security, and agreed that further
training on these areas should be
arranged for 2024. Members of the
Remuneration Committee signalled
the need to stay abreast of market
developments regarding remuneration
and financial crime legislation through
further training.
2022 review
The principal action arising from
the 2022 review was to ensure more
opportunities for the Directors to
spend informal time together. This
was achieved through scheduling in
more offsite meetings during the year.
The annual Board strategy session
was held offsite, enabling the Board
to spend more informal time together.
The mid-year Board and Committee
meetings were held at our Oslo office,
again providing more opportunities
for the Board to interact informally
both with each other and with
senior employees.
Director performance evaluations
The performance of the Non-Executive
Directors is reviewed annually in
tandem with the Board and
Committee effectiveness reviews,
and the Nomination Committee
agrees the approach to be taken.
The performance of the Chair and the
Non-Executive Directors was evaluated
focusing on the contribution made
by each Director over the year, how
that contribution was made and their
commitment to the role. The SID met
separately with the Non-Executive
Directors to seek feedback on the
Chair’s performance, and discussed
the output with the Chair.
The performances of the CEO and
the CFO & COO were also appraised
separately, and feedback was
presented to the Remuneration
Committee as part of the annual
remuneration review.
It was concluded that each Director
continued to perform effectively
and to demonstrate commitment
to their role.
Board and Committee effectiveness
The Board is cognisant that changes
in strategy, personnel and the external
environment may need to drive
changes in the way that we operate
in order to maximise our effectiveness.
We therefore recognise the benefits
of regularly evaluating our own
effectiveness and that of our
Committees (at least annually) so that
we can take any actions necessary
to ensure that we continue to
perform effectively.
As no substantive concerns had
been raised at the externally facilitated
review in 2022, the 2023 review was
internally facilitated. The Nomination
Committee led the review. An overview
of the process and timetable is
provided below.
Stages of the Board
and Committee
effectiveness
review
October 2023
Approach and areas
of focus agreed by the
Nomination Committee
November–December 2023
Questionnaires completed
One-to-one meetings between the
SID and other Directors to consider
the performance of the Chair
January 2024
Output reviewed and
discussed with the Chair,
SID and Committee Chairs
Areas of focus for 2024 agreed
February 2024
Feedback discussed and action
plans approved by the Board
and its Committees
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2023 Annual Report
Diversity
The Board recognises that diversity,
in its broadest sense, is a key driver
of an effective board. Board diversity
improves the quality and objectivity
of the decision-making process by
creating an environment where a range
of voices can engage in a debate.
Our Board aims to be comprised
of individuals with a broad range
of backgrounds, skills, experience,
expertise and perspectives, and which
utilises these qualities in order to
generate effective debate, challenge,
problem solving and decision-making.
We have adopted a Group Diversity
and Inclusion Policy, which also
incorporates our approach to Board
diversity. This confirms that the Board
strongly supports the principle of
boardroom diversity, which includes
a number of aspects including gender,
ethnicity, disability, religion and
political views. It does not include
measurable targets for any aspect
of diversity and explains that all
appointments are subject to formal,
rigorous and transparent procedures
and should be made on merit against
a defined job specification and criteria.
The Board is committed to supporting
the work of the Group to look for
new and innovative ways to ensure
a diverse and inclusive workforce
at every level of the organisation.
Our people are the driving force of our
Company, and we are committed to a
diverse and inclusive workplace where
we prioritise their health, wellbeing
and development. Our senior leaders
and the wider business understand
the value of an inclusive culture, where
everyone has an equal chance to do
well, and where all people can thrive
and develop, helping the business
to grow. We can see this represented
in our nationality statistics – our
workforce is made up of individuals
from 57 different countries across
the globe, which creates a vibrant
and energetic environment that truly
celebrates the varied cultures of those
who work for us.
Our DEI focus prioritises practical
steps that deliver tangible results
including recruiting a workforce which
represents people across all identities
and backgrounds by diversifying our
pool of candidates and recruitment
channels; affording all our employees
the same career opportunities through
clarity of expectation and consistent
assessment and promotion criteria;
ensuring our staff feel part of the
wider Clarksons global community
through engagement, communication
and support; and improving our
understanding of our workforce
through data capture and analytics.
An example of this in action is the
launch of the Global Trainee Broker
Programme during 2023 as part of
our early careers initiative. The cohort
of 18 trainees, across seven offices,
was made up of multiple nationalities
and was 39% female.
Induction
All newly appointed Directors
receive a comprehensive induction
programme which is tailored to their
needs. The Chair and the Group
Company Secretary are responsible
for designing an effective induction
programme, with the objectives of:
– Facilitating the Director’s
understanding of the Group from
both an internal and an external
perspective: its culture, stakeholders,
key businesses and markets, and
operations on the ground;
– Providing them with any key insights
into Committee-specific matters,
as relevant; and
– Enabling their effective contribution
to the Board as early as possible.
Development
As part of our ongoing development,
the Board receives briefings on legal,
regulatory and governance matters
as they arise. To ensure our ongoing
awareness of Group policies and
procedures, we also complete the
online training modules that are
mandatory for employees. During
2023, the Group’s External Auditor
led a training session on sustainability
and climate change. The Remuneration
Committee has also continued to
receive regular market updates from
its remuneration consultant.
Senior managers make presentations
to the Board on strategic matters
and key industry and business
developments, which provides us
with an opportunity to engage with
employees who may be considered
as part of succession planning. During
the year, presentations were made
to the Board on the market outlook,
and deep-dives into key business lines
were presented during the annual
Board strategy session.
119Clarkson PLC
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How the Audit and Risk Committee spent its time
1. External audit
Regular updates from the External
Auditor on audit plans, progress and
findings; private sessions with the
External Auditor (without management
present); and the recommendation to the
Board to reappoint the External Auditor.
2. Financial reporting
All matters relating to the release of
preliminary and interim results and trading
statements, including key judgements
and estimates, viability and going concern
assessments and the Annual Report.
3. Governance
Various matters including the annual
review of the Audit and Risk Committee’s
effectiveness, its Terms of Reference and
updates on sustainability reporting.
Meeting attendance
Meetings
Sue Harris (Chair) 4/4
Martine Bond
1
1/4
Dr Tim Miller 4/4
Heike Truol 4/4
1 Unable to attend meetings due to illness.The Chair ensured that there was an
opportunity for Martine to provide comments on the business of the meeting in advance.
4. Internal audit
Regular review of plans and reports from
internal audit outsourced partners, and
the annual review of their effectiveness.
5. Risk management
and internal controls
Strengthening the internal control
framework and implementation of the
next phase of our new global financial
system, as well as regular updates on risk
management, cyber security, compliance
(including sanctions) and litigation.
Committee highlights in 2023
Significance Progress
Implementation of our
new global financial system
Read more:
On page 121.
The system will enable the Group
to standardise and automate existing
processes, which will provide
significant improvements, efficiency
and transparency in our financial
control and reporting processes.
Phase 2 of the roll-out was successfully
launched mid-year, and the focus
over the rest of the year remained
on enhancing and embedding
functionality. The Audit and Risk
Committee approved the plan for
the wider global roll-out over 2024.
Compliance oversight
Read more:
On page 127.
As the geo-political landscape
continued to evolve at pace through
2023, compliance oversight
(encompassing KYC and sanctions)
remained an area of significant focus.
Our commitment to building a
global KYC/due diligence team and
investing in our sanctions capabilities
over recent years has been
maintained. In light of stricter and
more complex sanctions regimes,
the Audit and Risk Committee has
received regular updates on this area
and has satisfied itself that a robust
approach continues to be taken.
Integrity of financial reporting
Read more:
On pages 122 to 125.
As one of the Audit and Risk
Committee’s key roles, the
Committee has continued
to prioritise this area.
Throughout the year, the Audit
and Risk Committee has challenged
management on the estimates and
judgements they have made that
underpin our financial reporting,
whilst satisfying itself that the
right processes are in place for
the External Auditor to maintain
its independence.
External audit 27%
Financial reporting 14%
Governance 8%
Internal audit 16%
Risk management
and internal controls
35%
Audit and Risk Committee Report
At a glance
120 Clarkson PLC
2023 Annual Report
financial judgements and estimates
made by management in respect of
the 2023 half year and full year results,
supported by input from the External
Auditor (PwC), and was satisfied that
it could recommend them to the
Board for approval.
The Committee devoted a considerable
amount of time in 2023 to reviewing
enhancements to our internal control
and risk management systems.
As reported in 2022, management
is in the process of implementing
a new global financial system which
will provide significant improvements,
efficiency and transparency in
our financial control and reporting
processes. The second phase of the
implementation, focused on our largest
location in London, was completed
during the year, with no significant
issues being encountered. The
Committee received regular updates
through the year and, having challenged
management on the approach being
taken and considered the work of the
External Auditor around data migration
and controls, was satisfied that this did
not expose our financial reporting to
any significant risks. We will reap most
benefit from the system when it is
fully rolled out to our remaining global
locations. We have reviewed the final
phase of the roll-out plan, including
the associated risk assessment,
and are comfortable with both the
approach being taken and that the
right levels of expertise and resources
remain available in the finance team
to complete the implementation.
We also reported last year that
management had implemented a new
risk management system, which has
continued to provide benefits through
the rationalisation of the risks and
controls being monitored and
ensuring that key controls are easily
identifiable and robustly managed.
Internal audit remains a key element of
our system of internal control and our
outsourced partner (Grant Thornton)
undertook a number of audits through
the year. No significant issues were
identified, and management has
worked to complete the actions
required in response to findings.
The backdrop to our work in
2023 has been one of continued
geo-political instability, although the
macro-economic position was more
settled than in 2022. Against this
wider context, the Committee
reviewed the Group’s principal risks
and the associated risk factors at each
meeting. It proposed to the Board that
no changes were necessary to either
the principal risks or their risk factors
(following increases to the risk factors
of some risks in the prior year).
We remain of the view that climate
change is not a principal risk for the
Group at this time, but we consider it
to be a thematic risk which potentially
impacts a number of our principal
risks. The impact of climate change on
the Group and its wider sustainability
have been the focus of a significant
piece of work this year to undertake
the Group’s first materiality
assessment (see page 79 for further
detail). This has reinforced our view
that the most significant impact that
the Group can have on reducing
carbon emissions is through our work
on the green transition to enable our
clients to reduce their carbon footprint
through sector intelligence, technology
and vessel replacement strategies.
However, we are also aware of the
need to focus on our own carbon
footprint and work has continued to
review our reporting against the Task
Force on Climate-Related Disclosures
(‘TCFD’) including the measurement
of our Scope 3 emissions. Further
information is available on page 126.
The Company welcomes proportionate
developments to improve governance
and trust in financial reporting. We note
the recent publication of an updated
Code by the FRC, which we intend
to adopt in line with the required
implementation dates.
The Committee’s performance and
effectiveness were reviewed as part
of the internal Board evaluation
undertaken during the year, more
details of which can be found on
page 118. I am pleased to confirm
that the evaluation confirmed that
the Committee is operating effectively
and fulfilling the duties delegated to
it by the Board.
I continue to appreciate the valuable
input to our work from the other
members of the Committee, and
would like to thank them for their
support during the year.
I will be attending our AGM on 9 May
2024 and I look forward to answering
any questions about the work of the
Audit and Risk Committee.
Sue Harris
Audit and Risk Committee Chair
1 March 2024
Enhancing our
internal controls
in a fast-changing
world
Sue Harris
Audit and Risk Committee Chair
I am pleased to present our Audit
and Risk Committee Report for the
year ended 31 December 2023, which
provides an overview of the areas of
focus for the Committee during the year,
its key activities and the framework
within which it operates.
In line with the Code, the Board is
satisfied that the Committee as a
whole has experience and technical
competence relevant to the sector in
which we operate. It is the collective
experience of the Committee
members which allows us to provide
appropriate oversight and challenge.
The Committee’s role in supporting the
Board in meeting our objectives has
remained unchanged, and during the
year we have continued to focus on our
primary responsibilities of overseeing
the Group’s external financial
reporting, including the relationship
with the External Auditor, and the
effectiveness of the risk management
and internal control systems.
The Group’s financial statements are
of critical importance to investors and
the Committee monitors the quality
and integrity of the Group’s reporting
processes, accounting policies and
practices, before recommending the
statements to the Board for approval.
The Committee reviewed, and where
necessary challenged, the significant
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Significant issues considered in
relation to the financial statements
Issue
Risk of
impairment
of trade
receivables
Issue
Carrying value
of goodwill
Issue
Carrying value
of investments
(Parent Company)
Area of focus
A number of judgements are made
in the calculation of the provision,
primarily the age of the balance,
location and known financial
condition of certain clients,
existence of any disputes, recent
historical payment patterns and
any other available information
concerning the creditworthiness
of the counterparty.
Area of focus
Determining whether an impairment
charge is required for goodwill
involves significant judgements
about forecast future performance
and cash flows of cash-generating
units (‘CGUs’), including growth
in revenues and operating profit
margins. It also involves determining
an appropriate discount rate and
long-term growth rate.
Area of focus
Determining whether a
corresponding impairment charge
is required in the balance sheet of
the Parent Company in relation to
its investments involves significant
judgements about forecast future
performance and cash flows of
the investment, including growth
in revenues and operating profit
margins. It also involves determining
an appropriate discount rate and
long-term growth rate.
Audit and Risk Committee
review and conclusion
The Audit and Risk Committee
discussed with management the
results of its review, the internal
controls and the composition of
the related financial information.
The Audit and Risk Committee also
discussed with the External Auditor
its audit procedures in relation to
the provision and its findings.
The Audit and Risk Committee
is satisfied with management’s
judgements and that the level of
provisioning of £21.9m is consistent
with the evidence.
Audit and Risk Committee
review and conclusion
The Audit and Risk Committee
discussed with management the
results of its testing and evaluated
the appropriateness of the
assumptions used within its
impairment test model.
The results of the Audit and Risk
Committee’s review of management’s
testing were subsequently discussed
with the External Auditor.
The Audit and Risk Committee
is satisfied with management’s
assumptions and judgement, and
with the conclusions not to record
an impairment in any of the CGUs
and that appropriate sensitivity
disclosures have been included
in the financial statements.
Audit and Risk Committee
review and conclusion
The Audit and Risk Committee
discussed with management the
results of its testing and evaluated
the appropriateness of the
assumptions used within its
impairment test model.
The results of the Audit and Risk
Committee’s review of management’s
testing were subsequently discussed
with the External Auditor.
The Audit and Risk Committee
is satisfied with management’s
assumptions and judgement,
and with the conclusion not
to take an impairment charge
on the investments.
Audit and Risk Committee Report continued
122 Clarkson PLC
2023 Annual Report
Financial reporting
In reviewing the Company’s half year
and annual financial statements, the
Audit and Risk Committee considers
the overall requirement that the
financial statements present a ‘true
and fair view’ and takes account
of the following:
– The significant issues set out
in the table on the previous page.
These areas were agreed as part of
the audit planning process and the
Audit and Risk Committee discussed
them in detail with management
and the External Auditor throughout
the year.
– The accounting policies and
procedures applied (see note 2 of
the consolidated financial statements
on pages 161 to 169).
– The effectiveness and application
of internal financial controls.
– Material accounting assumptions and
estimates made by management
(see page 122).
– The External Auditor’s view
of management’s judgements
(as set out on pages 151 to 153).
– Compliance with relevant
accounting standards and other
regulatory financial reporting
requirements including the UK
Corporate Governance Code and
the European Single Electronic
Format (‘ESEF’) regulation.
The Company has complied with
ESEF, which requires the Annual
Report to be filed in a ‘tagged’ format.
The Finance team (which undertakes
the tagging) has provided the Audit
and Risk Committee with assurance as
to the process by which this has been
completed. The External Auditor is
not required to audit the tagging.
Fair, balanced and understandable
Whilst the Board is collectively
responsible for determining whether
the Annual Report, taken as a whole,
is fair, balanced and understandable,
the Audit and Risk Committee advises
the Board in this regard.
In making its assessment in respect
of the 2023 Annual Report, the Audit
and Risk Committee took into account
the process which management had
put in place to provide assurance,
as detailed below:
– The CFO & COO and Group
Company Secretary oversaw the
production of the Annual Report,
with overall governance, input and
review provided by a cross-functional
team of senior management.
– The messaging and tone were
agreed at an early stage, and
communicated to all contributors
to ensure consistency between the
narrative and financial reporting.
– The framework for the document was
reviewed to ensure that it would drive
a clear, balanced and understandable
report from a shareholder and
stakeholder perspective.
– An extensive verification process
was undertaken to ensure factual
accuracy.
– The External Auditor undertook
comprehensive reviews of drafts
of the Annual Report and presented
the results of its audit work to the
Audit and Risk Committee.
– Board members received drafts of
the Annual Report for their review,
challenge and input which provided
an opportunity to ensure that the
key messages in the report were
aligned with the Company’s position,
performance and strategy; to discuss
management’s views on each of
the key judgements and estimates;
and to satisfy themselves that these
were consistently reported in both
the Audit and Risk Committee
Report and the financial statements.
The Audit and Risk Committee
reviewed the final draft of the Annual
Report, and paid particular attention
to information and disclosures in the
report in relation to key risks, the
financial review, strategy, TCFD and
section 172 reporting. The Audit and
Risk Committee also considered the
Annual Report holistically and satisfied
itself on the following points:
Is the Annual Report fair?
– Are we reporting on both our
successes and opportunities
as well as our difficulties
and challenges?
– Are the key messages in the
narrative highlighted appropriately
and reflected in and consistent
with the financial reporting?
Is the Annual Report balanced?
– Is there a good level of
consistency between the
narrative reporting in the front
and the financial reporting in
the back of the report?
– Are the statutory and adjusted
measures explained clearly with
appropriate relative prominence?
Is the Annual Report understandable?
– Is there a clear and understandable
framework to the report?
– Do we explain our business
model, strategy and accounting
policies simply, using precise
and clear language?
– Is the layout clear with good
linkage throughout in a manner
that reflects the whole story?
On the basis of the process put in
place by management and its own
review and challenge of whether the
information necessary for shareholders
and stakeholders to assess the Group’s
position and performance, business
model and strategy was appropriately
disclosed, the Audit and Risk
Committee concluded that the 2023
Annual Report is fair, balanced and
understandable and advised the Board
accordingly. The Board concurred with
this view and the statement confirming
it can be found on page 149.
External audit
The Audit and Risk Committee
manages the relationship with the
External Auditor on behalf of the
Board. This includes recommending
the appointment of the External
Auditor to the Board and approving
their remuneration and terms
of engagement.
PwC has been the External Auditor
to the Group since 2009 and was
reappointed as External Auditor
in 2018 (in respect of the 2019 audit
cycle) following a competitive tender
process. PwC will be subject to
mandatory rotation in 2029.
Christopher Burns assumed the role
of Lead Audit Partner from the 2019
audit cycle and, in accordance with
PwC’s rotation rules and UK Ethical
Standards, he will rotate off as Lead
Audit Partner after the 2023 audit.
The Committee Chair and CFO &
COO liaised with PwC to identify a
successor, Timothy McAllister, who, to
ensure a smooth transition, shadowed
the current Lead Audit Partner for the
2023 audit and will assume the role
for the 2024 audit cycle.
The Audit and Risk Committee has
an open relationship with the External
Auditor, and effective and timely
communication is key to this. The
Audit and Risk Committee Chair
meets the External Auditor on a
regular basis during the year, whilst
the Audit and Risk Committee meets
privately with the External Auditor
without management present at least
twice every year in order to allow both
Committee members and the Auditor
to raise any issues directly and to
discuss the Auditor’s remit. The Lead
Audit Partner and the Group Audit
Director are invited to attend all
meetings of the Audit and Risk
Committee. At appropriate points in
the audit cycle, PwC presents reports
to the Committee on the plan and
approach for the full year audit and
half year review (including how audit
quality will be addressed), and the
outcome of their audit work.
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Audit and Risk Committee Report continued
Prior to these meetings, PwC engages
extensively with management to ensure
that planning is aligned appropriately
with the key judgement areas and to
challenge management’s assumptions,
judgements and estimates. The detailed
reports that PwC presents to the Audit
and Risk Committee at the full year and
the half year allow the Audit and Risk
Committee to assess the consistency
of the work undertaken with the audit
plan; and the quality of the audit,
taking note of the level of professional
scepticism employed and the degree
of challenge of management.
The significant issues considered
in relation to the 2023 financial
statements are set out on page 122.
These areas were agreed as part of
the audit planning process. The Audit
and Risk Committee has not requested
that the External Auditor review any
further areas falling outside of the
scope agreed at the start of the audit.
Independence
Processes have been implemented
by both the Group and the External
Auditor to safeguard the latter’s
independence from the Company.
This is a key element in creating an
environment in which the External
Auditor can carry out their
responsibilities to shareholders
and other stakeholders free
of influences which might affect
their professional judgement.
The Audit and Risk Committee has
developed a Non-Audit Services Policy
in order to ensure that appropriate
controls are in place around the use
of the External Auditor for non-audit
services. Details of the Non-Audit
Services Policy are set out to the right.
In addition, the Audit and Risk
Committee has approved a Policy on
Employment of Former Employees of
the Statutory Auditor, which requires
the Statutory Auditor’s internal
independence team to be consulted
if a Group company wishes to consider
employing a person who has been
a member of the audit team within
the past 24 months. The Group has
not employed any member of the audit
team or audit partners during the year.
In assessing the External Auditor’s
independence, the Audit and Risk
Committee also reviews PwC’s annual
independence letter which provides
the Audit and Risk Committee with
assurances over the internal control
procedures PwC has in place to
safeguard its independence and
objectivity. These include:
– Confirmation that there are no
relationships between PwC and
the Group or investments in the
Company held by individuals that
could impact on PwC’s integrity,
independence and objectivity;
– Compliance with the Group’s
Non-Audit Services Policy, the
nature and value of any non-audit
services provided and the safeguards
in place to mitigate any threats to
independence; and
– Confirmation of PwC’s rotation rules
and that these have been adhered
to. In accordance with PwC’s rotation
rules and UK Ethical Standards,
the lead audit partner must change
every five years and other senior
members of the audit team rotate
at regular intervals.
No areas of concern were raised
in 2023, and the Audit and Risk
Committee remains satisfied that
the independence and objectivity
of PwC have been maintained.
Non-Audit Services Policy
To ensure that the External Auditor
maintains its independence and
objectivity, the Audit and Risk
Committee has agreed that the
External Auditor and their associated
audit network firms will not be used
for any non-audit services, other
than certain prescribed exceptions.
The exceptions relate to where
services are required by statute
or regulation; or the local statute
law permits the provision of such
services, and the External Auditor
is best placed to preserve the quality
of the non-audit service and there
are limited feasible alternatives.
Note 3 on page 171 provides further
information on the fees paid to the
External Auditor for audit services
during the year. The External
Auditor did not carry out any
non-audit services during the year,
other than the half year review.
Auditor effectiveness
Alongside ongoing review throughout
the year, the Audit and Risk Committee
conducts an annual assessment of the
effectiveness of the External Auditor
and the external audit process. The
views of members of the Audit and
Risk Committee and management are
sought and the areas covered include:
– Reviewing the audit approach, plan
and scope;
– Evaluating delivery and performance
against the audit plan, including
feedback from the CFO & COO
and senior management in the
Finance team;
– Assessing the qualifications,
experience and expertise of the
audit team assigned to conduct
the audit; the availability of the
necessary resources to conduct a
comprehensive, timely and effective
audit; and the audit team’s knowledge
of the Company and the environment
in which the Group operates;
– Considering whether PwC is
appropriately focused on the
most significant risk areas, and the
effectiveness of review processes
and partner oversight;
– Seeking feedback on the
communication and engagement
between management and PwC,
and management’s responsiveness to
requests from PwC for information;
– Assessing the extent to which PwC
demonstrates professional scepticism
and challenges management;
– Reviewing the content and quality
of PwC’s written reports and
contributions to the Audit and
Risk Committee’s discussions;
– Considering the confidence of the
Audit and Risk Committee in PwC’s
judgements and its transparency
with the Committee;
– Reviewing compliance with the
Non-Audit Services Policy and other
procedures designed to safeguard
PwC’s independence and objectivity;
– Considering PwC’s quality control
procedures and how these support
the delivery of a high-quality
audit; and
– Discussing the latest FRC Audit
Quality Inspection report on PwC
and actions being taken by PwC
to address the findings raised.
In addition, during the year the FRC’s
Audit Quality Review team completed
a review of PwC’s audit of the
Company’s financial statements for
the year ended 31 December 2022.
No key findings were identified, and
an area of good practice was noted.
PwC discussed the review with the
Audit and Committee, which was
comfortable with PwC’s responses
to the areas of focus.
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The Audit and Risk Committee
made the following observations
during its review of the External
Auditor’s effectiveness:
– The audit partners and team were
confirmed to be of a high quality,
with no material issues raised in
the feedback received;
– The audit had been well planned
and delivered, with work completed
on schedule and management
comfortable that any key findings
had been raised appropriately,
as well as active engagement
on misstatements and appropriate
judgements on materiality;
– PwC demonstrated a strong
understanding of our business, the
wider industry in which we operate
and the risks and challenges we
face, and had focused on the areas
of greatest financial reporting risk;
– PwC’s reporting to the Audit and
Risk Committee was clear, open
and thorough; and
– There had been an appropriate
level of challenge during the course
of the audit, with PwC and the Audit
and Risk Committee challenging
management’s judgements and
assertions on key accounting
judgements.
Following its annual review of
effectiveness of the External Auditor,
the Audit and Risk Committee reported
its findings to the Board, concluding
that PwC remained effective and
had delivered a quality audit.
Auditor reappointment
Taking into account the review of
independence and effectiveness of the
External Auditor, the Audit and Risk
Committee recommended to the Board
the reappointment of PwC. Resolutions
reappointing PwC as External Auditor
and authorising the Directors to set
the Auditor’s remuneration will be
proposed at the 2024 AGM.
Statutory Audit Services Order
The Audit and Risk Committee
confirms its compliance for the year
ended 31 December 2023 with the
Competition and Markets Authority’s
Statutory Audit Services for Large
Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014.
Internal controls and risk management
Together with the Board, the Audit
and Risk Committee is responsible
for reviewing the adequacy and
effectiveness of the Group’s system
of internal control and the risk
management framework. The Group’s
system of internal control is designed
to manage, rather than eliminate,
the risk of failure to achieve business
objectives, and can only provide
reasonable and not absolute assurance
against material misstatement or loss.
Key features of our system of internal
control are set out below.
Overview of internal controls
Governance framework A defined schedule of matters
reserved for the Board, which is
reviewed by the Board annually,
supported by a governance
framework with defined
responsibilities and authorities.
Delegated authorities An organisational structure with
clearly defined levels of authority,
which are documented through
a matrix of delegated authorities.
Risk identification
and monitoring
An embedded risk management
process, underpinned by associated
controls, which includes monitoring
and assessing current and emerging
risks and regular review of the
risk register.
Details of the risk management
structures in place are provided
within the Risk management
section on pages 64 to 73.
Staff awareness Documented policies and procedures,
which have been communicated
across the Group.
Promotion of awareness of key
policies amongst the workforce
through both internal online training
and an annual requirement for
employees to confirm that they
have read and will comply with the
Compliance Code, in which internal
policies are documented.
Financial reporting
and procedures
A comprehensive system of financial
reporting and business planning.
A Minimum Controls Framework
which sets out the minimum level
of financial controls that should be
operated throughout the Group.
Internal audit An internal audit plan focused
on key risk areas and Audit and Risk
Committee oversight of the outcomes,
including any actions which have been
satisfactorily completed and those
which are outstanding.
External audit Reports from the External Auditor
on internal controls (including financial
and IT controls) as part of the full year
audit and the half year review.
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Audit and Risk Committee Report continued
During the year, the Audit and Risk
Committee reviewed an update on
the Company’s internal controls over
financial reporting, which were
enhanced during the year by:
– The completion of phase 2 of the
implementation of our new global
financial system which is providing
significant improvements, efficiency
and transparency in our financial
control and reporting processes.
– The further embedding of the risk
management system implemented
in 2022, resulting in the rationalisation
of a number of risks and controls to
avoid duplication and allow closer
monitoring of key risks.
Principal risks
The Audit and Risk Committee
regularly reviews the principal
risks and actions to mitigate them.
No changes were made to our
principal risks or their risk factors
during the year. This followed the risk
factor of the following principal risks
being increased in 2022: economic
factors, cyber risk and data security,
loss of key personnel – normal course
of business, and adverse movement
in foreign exchange.
Risks from climate change continue to
be at the forefront of our thinking and
our strategy explicitly seeks to work
with our clients to reduce the impact
on the environment of shipping
globally. Risks associated with climate
change also remain an area of focus
for the Group’s stakeholders, and form
part of our risk management processes.
The Audit and Risk Committee has
maintained its focus on our reporting
against the TCFD recommendations
in 2023. The principal areas of focus
have been evolving our sustainability
framework (which will in turn impact
on our TCFD disclosures) and on the
approach to extending the limited
Scope 3 emissions that we already
report on. Following work undertaken
in 2022 to start collating wider Scope 3
data, a revised approach is now being
taken. This is focused on assessing all
Scope 3 categories in relation to our
largest broking subsidiary, rather than
our previous approach of focusing
on the Scope 3 categories that we
had selected and measuring them
in our largest locations. This revised
approach ensures that assumptions
will not be made regarding which
Scope 3 categories are most relevant
to the Group. Work is continuing in
this area to satisfy the Committee
of the robustness of the Scope 3 data
before it is disclosed. Aligned with
disclosures in previous years, both
management and the Audit and Risk
Committee remain of the view that
climate change, whilst not a principal
risk for the Group, does give rise to
a number of risks and opportunities,
and is a thematic risk which potentially
impacts across a number of our
principal risks. Our disclosures against
the TCFD recommendations can be
found on pages 74 to 77.
Further information on all of our
principal risks, the controls in place
and actions taken during the year to
mitigate them can be found in the Risk
management section on pages 68 to 71.
The annual review of risk, controls
and risk management processes
was overseen by the Audit and Risk
Committee. On the recommendation
of the Audit and Risk Committee,
the Board concluded that:
– The Group’s systems of internal
control and risk management were
appropriately designed and operated
effectively during the year;
– No significant control deficiencies
had been identified during the year;
– The residual risks fall within the risk
appetite for the Group; and
– Given the comprehensive nature
of the annual formal assessment
of risks and the regular monitoring
throughout the year, it was satisfied
that there were no significant known
emerging risks which could materially
impact on the achievement of the
Group’s strategic objectives in
the near term.
Going concern
The Audit and Risk Committee
assesses whether it can recommend
to the Board that the going concern
basis can continue to be adopted
in preparing the financial statements.
Management presented an assessment
of the Group’s prospects and risks,
assumptions and sensitivities to
support the Audit and Risk Committee
in making its recommendation.
Sensitivity testing was prepared,
which modelled different assumptions
with respect to the Group’s cash
resources. Areas considered included
varying levels of downturn in profit
and cash generation to reflect a
significant impact on world seaborne
trade, drawing on that experienced
in the global financial crisis in 2008,
following the onset of COVID-19 in
2020 and the Russia-Ukraine conflict
in 2022. A reverse stress test was also
performed to determine what it might
take for the Group to encounter
financial difficulties. On the basis of the
information reviewed, the Audit and
Risk Committee concluded that it was
satisfied that it could recommend to
the Board that the preparation of the
financial statements on a going concern
basis remained appropriate. Further
information about the going concern
assessment is set out on page 73.
Viability statement
The Audit and Risk Committee
recommended to the Board the
approval of the viability statement
(which is set out on pages 72 and 73).
Cognisant that changes in both the
internal and external operating
environment could impact on the
Group’s viability, the Audit and Risk
Committee receives an update from
management as to the prospects of
the Group which includes key financial
indicators (including profitability,
liquidity and the forward order book),
business factors and the principal
risks. Ahead of recommending the
approval of the statement to the
Board, a detailed report was
presented by management which
considered the impact on viability
of scenarios which are linked to the
Group’s principal risks, as well as
the compounding impact of certain
scenarios. This report applied the
sensitivity analysis used to support the
going concern assessment, which was
extended to enable assessment over
a longer timeframe. The Audit and Risk
Committee also revisited the period
over which previous assessments of
the Group’s viability have been made
and confirmed that a three-year
timeframe remained appropriate.
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Compliance
The Audit and Risk Committee receives
an annual compliance update which
assesses compliance with current
and evolving regulatory requirements,
best practice and areas of focus by
the compliance team. In addition,
interim updates on key areas of focus
are presented to each meeting. These
reports provide assurance to the Audit
and Risk Committee in respect of the
appropriateness of controls relating to
compliance with laws and regulations
in all jurisdictions in which the Group
operates. Sanctions regimes have
remained complex and continued
to evolve over the year, requiring
increased compliance oversight.
In order to support employees’
understanding of the standards of
conduct and ethics expected of them,
the Board has approved a Compliance
Code. This includes a suite of policies
that mitigate ethics and compliance
risks, which all employees and
contractors must comply with. Annual
training is provided which all employees
must complete. In addition, the Group’s
regulated businesses are subject to
further compliance requirements
which are set out in local compliance
manuals. Embedding of policies and
processes is supported by a global
compliance team, which was further
strengthened during the year. The
Audit and Risk Committee is satisfied
that the team has the necessary skills
and experience to fulfil its duties.
Further details regarding our policies
and procedures in relation to anti-bribery
and corruption, anti-money laundering
and sanctions can be found on
pages 99 and 100.
Internal audit
Internal audit is one of the principal
elements of the Group’s internal
control system and provides the Audit
and Risk Committee with independent
assurance over, and insight into, the
effectiveness of risk management
systems, governance processes and
business controls. Recommendations
are made to address any key findings
and improve processes.
Group activities
Grant Thornton was appointed by
the Audit and Risk Committee as an
outsourced partner to provide internal
audit activities in the wider Group
in late 2018 following a competitive
tender process. Grant Thornton is
considered by the Audit and Risk
Committee to be independent.
A rolling three-year, risk-based
plan is in place to ensure appropriate
coverage of key internal controls.
The plan is approved annually, and
progress against the plan is monitored
by the Audit and Risk Committee
through regular updates on activities
and on the status of actions arising
from previous audits. The Audit and
Risk Committee maintains a view of
upcoming audit activity and the plan
may be flexed to prioritise new areas
of focus arising from changes in the
risk profile, strategic priorities, and
business and regulatory change.
In 2023, audits were carried out on
Bribery & Corruption, Treasury, Payroll
(non-UK), Minimum Control Framework
Testing, Talent and Performance
Management and Maritech Product
Development. No high-risk issues were
identified through the course of the
audits and implementation of audit
actions is being tracked through
regular updates to the Audit and
Risk Committee.
In its final meeting of 2023, the Audit
and Risk Committee revisited the rolling
three-year plan. Changes to the
sequencing of some audits were agreed
in order to ensure adequate focus on
key risk areas for the coming year.
The Committee Chair meets
separately with Grant Thornton
to receive updates on planned and
completed internal audit activities.
The Audit and Risk Committee meets
privately with Grant Thornton without
management present at least once
every year in order that Grant
Thornton can raise any issues directly.
The Audit and Risk Committee
reviewed the effectiveness of the
internal audit services provided
by Grant Thornton during the year.
This assessment focused on the
purpose, processes, performance
and relationships with Grant Thornton.
The Committee concluded that Grant
Thornton remained effective. At the
time of Grant Thornton’s engagement,
the appointment of an outsourced
partner had been agreed to be the
most effective approach to supporting
internal audit activities, and the
Committee confirmed that it was
satisfied that the current arrangements
continued to provide effective assurance
over the risk and control environment.
Clarksons Securities AS (‘Securities’)
Due to its regulated status, a separate
internal audit arrangement is in place
for our banking and finance
operations headquartered in Norway.
During 2023, KPMG performed this
function on an outsourced basis. The
Securities board approves the annual
plan and reviews the results of audits.
An update on activities was provided
regularly to the Audit and Risk
Committee. There were no significant
issues identified during the year.
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How the Remuneration Committee spent its time
1. Individual remuneration arrangements
Confirmation of remuneration outcomes
in respect of 2022 for the Executive
Directors, including the non-discretionary
bonus outturn and the assessment
of non-financial objectives for the
CFO & COO.
2. Performance-related
incentive schemes
Including 2022 bonus outturn,
performance measures and targets for the
2023 performance year, and parameters
and quantum of awards to be made
under the LTIP in 2023.
3. Remuneration in wider Group
Annual review of workforce remuneration
and gender pay gap reporting.
Meeting attendance
Meetings
Dr Tim Miller (Chair) 3/3
Martine Bond
1
1/3
Laurence Hollingworth 3/3
Birger Nergaard
1
1/3
1 Unable to attend meetings due to illness.The Chair ensured that there was an opportunity
for Martine and Birger to provide comments on the business of the meeting in advance.
4. Strategy (including shareholder
engagement)
Review of the Company’s remuneration
arrangements in the context of the
wider market, shareholder engagement
strategy ahead of and following the
2023 AGM.
5. Governance
Various matters including the annual
review of the Remuneration Committee’s
effectiveness, its Terms of Reference and
the annual review of the effectiveness of
the Remuneration Committee’s advisor.
Individual remuneration
arrangements
15%
Performance-related
incentive schemes
16%
Remuneration in wider Group 34%
Strategy (including shareholder
engagement)
16%
Governance 19%
Committee highlights in 2023
Significance Progress
Engagement with shareholders
regarding remuneration
outcomes ahead of the
vote at the 2023 AGM
Read more:
On page 130.
Engagement is crucial in our
shareholders understanding of
the market in which we operate
and the success of our Directors’
Remuneration Policy, both in our
specific context and against the
delivery of the strategy. It also
allows us to understand the
views of our shareholders.
Meetings were offered to our key
shareholders, a number of whom
met with us, allowing an open and
frank exchange of views.
Renewal of the Directors’
Remuneration Policy
at the 2023 AGM
Read more:
On pages 130.
The Directors’ Remuneration Policy
reflects our current pay model, which
has served the Company and its
shareholders well for many years,
and is necessary to retain our highly
performing executives.
The Policy was approved by
shareholders at the 2023 AGM.
Consideration of workforce
remuneration in the wider Group
Read more:
On page 131.
As a people business in a
competitive market, ensuring that
the financial (and non-financial)
rewards we give our employees are
competitive and support attraction,
engagement and retention is key.
We have maintained our focus
on ensuring that the total reward
package remains competitive.
We have continued to enhance
the remuneration metrics reviewed
by the Remuneration Committee
to ensure that they provide relevant
context for the Committee to assess
workforce remuneration.
Directors’ Remuneration Report
At a glance
128 Clarkson PLC
2023 Annual Report
Performance and reward for 2023
Our full year performance bonuses
were, as in previous years, based on a
bonus pool linked to Group underlying
profit before taxation
1
targets which
essentially operates as a profit-sharing
arrangement. At the beginning of
2023, and in keeping with previously
successful years where bonus
thresholds were increased, the
Remuneration Committee assessed
the threshold levels for 2023 and
increased them by 6%.
After waiving £5.5m in favour
of bonus pools for other colleagues
over the past nine years, the Executive
Directors have this year determined
that there is no need to waive any
remuneration as the record profits
across all segments of the business
are sufficient to properly reward all
employees under the pre-existing
bonus pools.
The awards granted to Executive
Directors under the Long Term
Incentive Plan (‘LTIP’) on 13 April 2021
were subject to challenging absolute
EPS and relative TSR performance
targets. In 2023, the performance
of the Group was such that both
EPS and TSR exceeded the upper
vesting targets and thus achieved
a 100% vesting.
Our Executive Directors have both
served the Company since 2006, and
this is therefore the 15th year whereby
long-term incentives were capable
of vesting. During this tenure, shares
dependent on EPS targets have fully
vested in only three years, partially
vested in three years and lapsed
completely in nine years and shares
dependent on TSR targets have fully
vested in five years, partially vested
in nine years and lapsed completely
in one year. Consequently, on only
two occasions during the tenure of
our current Executive Directors, has
the LTIP vested in full, confirming that
the targets set for the LTIP are
stretching and challenging.
On behalf of the Board, I am very
pleased to introduce the Directors’
Remuneration Report for the year
ended 31 December 2023.
Wider context
2023 was another highly successful
year for the Company with underlying
profit before taxation
1
of £109.2m
(2022: £100.9m), reported earnings
per share
1
of 275.2p (2022: 247.9p)
and increased free cash resources
1
of £175.4m (2022: £130.9m).
This improved financial position,
strong free cash flow and forward
visibility provided by an increased
forward order book of US$217m,
gives the Board continued confidence
in our progressive dividend policy,
increasing the annual dividend for
the 21st consecutive year to 102p.
Company outperformance is also
evidenced through the continued
delivery of superior total shareholder
returns (‘TSR’) with a 10-year TSR
of 109% (compared with 61% for the
FTSE 250) and approximately 28%
over the last three years (compared
with 4% for the FTSE 250).
The performance of the business is
the direct result of a clear, innovative,
and well executed strategy driven
by our Executive Directors and the
Board. Our Executive Directors have
achieved these results by focusing
on all aspects of the business, being
thought leaders in the evolution of
our industry and ensuring the
Company is positioned to benefit
from market opportunities whilst at
all times maintaining the highest levels
of client service. These results reflect
decisions taken over many years to
invest in people, technology, data and
corporate acquisitions to broaden our
product, sector and global offer.
Whilst we recognise that our
executive pay arrangements do not
accord with the norm for FTSE 250
companies, they are proven to work
in the context of our business and
competitive environment, delivering
outstanding shareholder value, and
incentivising and retaining our highly
effective and long-serving Executive
Directors. The shareholders who
have held our shares for an extended
period understand the market in
which we operate and the success
of the Directors’ Remuneration Policy
(the ‘Policy’) both in our specific
context and against the delivery
of the strategy. We hope that our
performance and the success of
the business again justifies our
shareholders’ support.
Aligning
executive pay
with performance
Dr Tim Miller
Remuneration Committee Chair
1 Classed as an APM. See pages 219 and 220
for further information.
129Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Remuneration Report continued
The Remuneration Committee
applied the rules of the LTIP without
any exercise of discretion, leaving
the challenging targets unchanged at
the levels set at grant. The Committee
also noted that various institutional
shareholder guidelines refer to
committees considering whether
awards have led to inadvertent
windfall gains. In this regard, the
Committee noted:
– The share price used to determine
the number of shares over which the
2021 grant was made was £28.87,
being higher than the £24.02 used
for the 2020 grant, so the grant
was over a smaller number of shares
demonstrating that the grant was
not made over an artificially
increased number of shares;
– The performance conditions have
always related to financial years and
assessed performance consistently
relative to the FTSE 250 (excluding
investment trusts) as a whole, since
entry into this index in 2015. Vesting
therefore reflects the Company’s
superior performance compared
with the constituents of this index
over many years as demonstrated
through longer-term as well as
three-year out-performance;
– The EPS conditions were aligned with
the three-year business plans and the
achievement of a 144% increase in
profits over the period; and
– While the grant was subsequent
to the main impacts of COVID-19,
for completeness, the Company
was not directly adversely impacted
by COVID-19 and consequently did
not take any government loans
nor accept any furlough support.
Furthermore, over this period the
Company paid all suppliers in good
time and paid dividends throughout
continuing our 21-year unbroken
progressive dividend policy.
On assessing the outturn, the
Remuneration Committee was
satisfied that this was appropriate.
Policy renewal
The Policy was renewed at the 2023
AGM with just over 56% shareholder
support. While this level of support
is less than we would ideally like, the
majority of our shareholders continue
to support us securing the retention
and incentivisation of executives who
have consistently delivered exceptional
returns for shareholders since 2006.
So the Policy, as renewed in 2023,
maintains the current pay model for
incumbent Executive Directors but,
importantly, commits to change
it for new appointments.
The current model has served the
Company and its shareholders well
for many years and is necessary to
retain our current highly performing
executives who fulfil dual roles as
both conventional Executive Directors
but also key operational executives
in the business. We do recognise that
our arrangements appear increasingly
unusual against UK-listed company
practice and that any new
arrangements should be more
consistent with market norms. The
fact that it has operated successfully
is evidenced by the Company’s TSR
relative to the FTSE 250 (the main
broad index of which the Company
is a member) over the life of the Policy
as shown on the chart below.
While we hope that our current
Executive Directors will continue
to add value to the Company for
a number of years, changes to
remuneration for successors to their
roles thereafter will be implemented
and the current arrangements are,
therefore, legacy. Those changes
(including the adoption of an annual
bonus cap), together with further
detail on the rationale for the current
approach for incumbents, are set
out in last year’s report.
It is worth reiterating that both Andi
Case and Jeff Woyda have proven
to be exceptional leaders for our
Company, and can be credited with
developing and executing the strategy
which has seen Clarksons develop
into the industry leader that it is today,
operating from over 60 offices across
24 countries, creating a team which
has grown from 600 to over 2,000
people and securing a leading position
in all market sectors.
The way in which remuneration
and contractual commitments have
been handled has been central to the
Company’s success and has served
shareholders well since Andi became
CEO in 2008 and Jeff became CFO in
late 2006 (and also became COO in
2015). During their tenure at the helm:
– Clarksons’ share price has increased
from a low point in December 2008,
following the credit crunch and
collapse of freight rates, of £3.20 to
£31.65 (as at the end of the financial
year), a 889% increase in absolute
terms, and an outperformance of
the FTSE 250 by 670% over the
same time.
– Ordinary dividends have increased
by 121%, in line with our commitment
to a progressive dividend policy
which has been unbroken for
21 years.
– £276.6m has been paid in dividends
to shareholders.
TSR performance
FTSE 250
Clarkson PLC
28%
4%
130 Clarkson PLC
2023 Annual Report
Implementation of the Directors’
Remuneration Policy in 2024
The Policy will be implemented in 2024
as follows:
– Salary: There will be no change
to Executive Directors’ salaries.
This means that the CEO’s salary is
unchanged since his appointment as
CEO in 2008, and the CFO & COO’s
remains unchanged since 2015.
– Annual bonus: Performance
bonuses continue to be linked to the
Group’s underlying adjusted pre-tax
profits for the year. No bonuses are
payable to Executive Directors below
a threshold level of profit. The CFO
& COO’s share of the pool varies
depending upon the Remuneration
Committee’s assessment of the
delivery of his personal objectives as
explained in more detail in the main
report. These objectives reflect both
his contribution to business success
and to meeting the Board strategic
priorities, including those that are
ESG-focused.
– LTIP: The Executive Directors
will receive LTIP awards equivalent
to 150% of base salary in 2024.
The performance targets will be,
as in prior years, 50% based on
EPS in the year of vesting and 50%
based on relative TSR measured
independently over a three-year
period. The EPS performance target
has been set at a threshold of 301p
to a stretch target of 340p in 2026.
The TSR targets will continue to be
measured relative to the performance
of the constituents of the FTSE 250
Index (excluding investment trusts).
Any vested shares from the 2024
performance-related LTIP grant
will be subject to a two-year
post-vesting holding period.
– Share ownership guidelines:
A guideline of two times salary
will continue to apply for
Executive Directors.
Applying a consistent approach to
our pay arrangements over many years
has both provided a clear incentive
for the executives to deliver for our
shareholders over time and has led to
the build-up of significant shareholdings
(approximately 32 times and nine times
salary for the CEO and CFO & COO
respectively) which is significantly
higher than typical FTSE 250 levels
and which, in turn, reaffirms alignment
with shareholders. This alignment is
further reinforced by the existence of
clawback provisions, four-year bullet
vesting of deferred shares and a
two-year post-vesting holding period
on LTIP awards.
All-employee remuneration matters
The Board remains committed to
giving as many employees as possible
the opportunity to share in the Group’s
success through all-employee share
plans, and I am delighted that, over
the last few years, we have been able
to extend invitations to participate in
our ShareSave plans (or plans which
operate in a similar way) to around 70%
of our global employees. We continue
to strive to give as many colleagues
as possible the opportunity to become
shareholders in the Company.
While the Executive Directors
themselves have not received salary
increases since appointment to their
current roles, the Company continues
to recognise the need to pay other
colleagues appropriately and 83% of the
workforce received bonuses for 2023
with 67% receiving salary increases.
Conclusion
The remuneration outcomes
detailed in this report rightly reflect
the outstanding and record year of
performance for the business, led by
our Executive Directors. The results
are proof of the successful execution
of the strategy which benefits all
stakeholders and is the driver of the
Policy. We trust that you will vote in
favour of the Directors’ Remuneration
Report at the 2024 AGM and we look
forward to your support.
I, together with the Chair of
Clarksons, will be engaging with
major shareholders in the coming
weeks. Should you wish for a meeting,
or have any questions or comments,
please contact me through the
Group Company Secretary at
company.secretary@clarksons.com.
Dr Tim Miller
Remuneration Committee Chair
1 March 2024
131Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Remuneration Report continued
Annual Report on Remuneration
Implementation of the Directors’ Remuneration Policy for 2024
Base salary
No changes have been made to the base salaries of the Executive Directors for 2024, and salaries therefore remain as set
out below:
1 January
2024
£000
1 January
2023
£000 % change
Andi Case 550 550 0%
Jeff Woyda 350 350 0%
Taxable benefits
The taxable benefits received by the Executive Directors in 2023 included a car allowance, private medical insurance and
club memberships. No material changes to taxable benefits are proposed for 2024.
Annual bonus for 2024
The annual bonus opportunity for 2024 will be calculated on the same basis as in previous years and will continue
to be based on a bonus pool derived from Group profit before tax as follows:
– Below a ‘profit floor’ set by the Remuneration Committee: no bonus is triggered; and
– Above the profit floor: an escalating percentage of profits is payable into a bonus pool for progressively higher profit
before tax performance.
As in 2023, the share of the executive bonus pool allocated to the CFO & COO will, in part, be determined by performance
against a series of non-financial, strategic and operational objectives.
The profit floor and thresholds for 2024 have not been disclosed on a prospective basis as these are considered
to be commercially sensitive, although disclosure will be provided retrospectively.
Consistent with the policy applied to the majority of senior employees, 90% of the bonus payable will be paid in cash with
10% deferred into restricted shares, which vest four years after grant in accordance with the rules of the Long-Term Incentive
Plan. The Executive Directors have agreed to this deferral, although they have no contractual obligation to defer bonuses.
Clawback provisions will continue to apply in circumstances of misstatement or error.
Long-term incentive awards to be granted in 2024
Consistent with past practice, it is envisaged that:
– Executive Directors will receive LTIP awards over shares worth up to 150% of salary in 2024;
– The vesting of 50% of the awards will be determined by the Company’s Earnings Per Share (‘EPS’) for 31 December 2026,
as shown in chart (i) below. The EPS for 2023 is shown (grey line) for reference; and
– The vesting of the remaining 50% will be determined by the Company’s Total Shareholder Return (‘TSR’) performance
from 1 January 2024 to 31 December 2026 against the constituents of the FTSE 250 Index (excluding investment trusts),
as shown in chart (ii) below. The level of TSR achieved against the FTSE 250 Index over the last three-year cycle is shown
(grey line) for reference.
EPS and relative TSR are considered to be the most appropriate measures of long-term performance for the Group, in that
they ensure executives are incentivised and rewarded for the earnings performance of the Group as well as returning value
to shareholders.
The awards will be subject to clawback provisions and a two-year post-vesting holding period.
(i) EPS target range for 2024 award (50% of award) (ii) TSR target range for 2024 award (50% of award)
275p 301p 340p
Vesting schedule for 2024 award
2023 EPS
100%
75%
50%
25%
0%
% of EPS
award vesting
(50% of award)
EPS target (pence) for FY ended 31 December 2026 for the 2024 award
Median Upper quartile
1st place
TSR performance range Actual result in last three-year TSR cycle
100%
75%
50%
25%
0%
% of TSR
award vesting
(50% of award)
TSR ranking at end of three-year performance period
The Remuneration Committee has carefully considered the EPS range for the 2024 award and believes the 301p to 340p
range is stretching against market consensus and the actual 2023 EPS delivered.
132 Clarkson PLC
2023 Annual Report
Fees for the Non-Executive Directors
Fees for the Non-Executive Directors (including the Chair) for 2024 are as set out below. Supplementary fees are paid
in respect of certain additional duties. The fees for the Chair and the Non-Executive Directors were reviewed in 2023
and applied with effect from the dates noted below.
2024
£000
2023
£000 % change
Chair
1
210 210 0%
Non-Executive Director
2
62 58 7%
Chair of Committee
3
19 19 0%
Senior Independent Director
3
19 19 0%
Employee Engagement Director
3
15 15 0%
Chair of the Trustees of staff pension schemes
3
15 15 0%
1 Annual fee increased from £185,000 to £210,000 in August 2023 with effect from 1 January 2023.
2 Annual fee increased from £57,680 to £61,500 in November 2023 with effect from 1 June 2023.
3 Supplementary fee payable to the Chairs of the Audit and Risk Committee and the Remuneration Committee, the Senior Independent Director,
the Employee Engagement Director and the Chair of the Trustees of staff pension schemes.
Single total figure tables (audited)
The following tables set out the total remuneration paid to the Directors for the years ended 31 December 2023
and 31 December 2022. We consider Clarkson PLC Directors to be the only key management personnel.
Executive Directors
2023
Base salary
£000
Taxable
benefits
1
£000
Pension
2
£000
Total fixed
remuneration
£000
Performance-
related
bonus
3
£000
Long-term
incentives
4
£000
Total variable
remuneration
£000
Total
remuneration
5
£000
Andi Case 550 17 72 639 10,412 884 11,296 11,936
Jeff Woyda 350 12 46 408 2,693 563 3,256 3,664
Total 900 29 118 1,047 13,105 1,447 14,552 15,600
2022
Base salary
£000
Taxable
benefits
1
£000
Pension
2
£000
Total fixed
remuneration
£000
Performance-
related
bonus
6
£000
Long-term
incentives
7
£000
Total variable
remuneration
£000
Total
remuneration
£000
Andi Case 550 16 72 638 8,396 1,120 9,516 10,154
Jeff Woyda 350 12 46 408 2,172 712 2,884 3,292
Total 900 28 118 1,046 10,568 1,832 12,400 13,446
1 Taxable benefits comprises the gross value of any benefits paid to the Director, whether in cash or in kind, prior to UK income tax being charged.
Further details are provided on page 132.
2 Pension paid as a cash supplement. Further details are included on page 138.
3 Performance-related bonus represents the value of the total bonus, prior to any sums being deferred into shares. See pages 134 and 135 for
further detail on the 2023 bonus outcome. The bonus reflects the 8.2% increase in underlying profit before taxation. Underlying profit before
taxation is classed as an APM (see pages 219 and 220 for further information).
4 Further detail regarding the vesting outcome is included on page 135.
5 In the year ended 31 December 2023, the aggregate remuneration paid to all Directors who served during the year in respect of qualifying
services (comprising salary/fees, taxable benefits, cash contributions to pension arrangements and performance-related bonus) was £14.7m.
6 The bonus is after a waiver in respect of 2022 of 8.5% of their entitlement.
7 The vesting outcome has been restated based on the actual share price on the date of vesting (9 May 2023, £30.30), having been estimated
in the 2022 Annual Report based on the average share price over the period 1 October 2022 to 31 December 2022.
133Clarkson PLC
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Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Non-Executive Directors
Fees
123
£000
Appointment date
(if later than 1 January 2022)
Resignation date
(if earlier than 31 December 2023) 2023 2022
Current Directors
Martine Bond 60 58
Sue Harris 97 82
Laurence Hollingworth 210 164
Dr Tim Miller 94 91
Birger Nergaard 60 58
Heike Truol 75 62
Former Directors
Peter Backhouse 31 Dec 22 – 70
Sir Bill Thomas 2 Mar 22 – 32
Total 596 617
1 Annual fee for the Chair increased from £185,000 to £210,000 in August 2023 with effect from 1 January 2023.
2 Annual fee for the Non-Executive Directors increased from £57,680 to £61,500 in November 2023 with effect from 1 June 2023.
3 The fees paid to the Non-Executive Directors relate to the period for which they held office.
Annual bonus targets (audited)
Consistent with the way in which it operated in prior years, the annual bonus for 2023 was based on the allocation
of the following pool:
Executive Directors: bonus pool
Underlying profit before taxation and bonus (£127.1m)
% of pre-bonus
profit
If profit < £33.63m 0%
If profit > £33.63m then £0m – £67.25m 8%
If profit > £67.25m then £67.25m – £78.41m 12%
If profit > £78.41m then on profits > £78.41m 13%
This formula generated a pool of £13.1m, with the CEO entitled to 79.5% of the pool and the CFO & COO entitled to 17.1% to
20.5% of the pool (dependent on delivery of his personal objectives). The pool operated in exactly the same way as in prior
years. The above percentages reflect the proportion of the pool payable to the Executive Directors only. For ease, the
percentages in the above table have been rounded to the nearest whole number.
The discretionary element of the CFO & COO’s bonus for 2023 was dependent on personal performance against
non-financial objectives set by the CEO and approved by the Remuneration Committee. The objectives set and a summary
of achievements against those objectives are set out below.
Objective Key achievements
ESG – Carbon Disclosure Project rating maintained at Grade C.
– Appointed an ESG advisory firm to support with identifying our ESG priorities
and actions:
– Researched and reviewed Clarksons’ existing ESG-related policies, data
and performance to establish a baseline.
– Conducted a materiality assessment to determine Clarksons’ ESG priorities
and form the foundation of an action plan.
– Launched the Clarksons Academy as the consistent global access point
for all learning and development opportunities in June 2023.
– Oversaw £1.69m in grants and pledges via The Clarkson Foundation, supporting
charitable projects.
Technology – Integration of two Sea acquisitions.
– Completed implementation of Workday Financials as the primary accounting
ledger of the Group.
Group development – Review of Futures and Options business, including evolution in the complex
regulatory environment.
– Further development of commercialisation of data capabilities and opportunities.
Management evolution
and capability
– Group Finance Director hired July 2023 and inducted through the balance
of the year.
Risk, compliance
and cyber security
– Oversaw the complex evolution of trading sanctions and impact on KYC
and their implications for the Group.
– Implementation of appropriate system control enhancements to meet regulatory
requirements within Futures.
134 Clarkson PLC
2023 Annual Report
Following consideration of the recommendation from the CEO with regard to the CFO & COO’s performance against his
personal objectives, the Remuneration Committee decided to award the CFO & COO the maximum 20.5% of the bonus pool.
The bonus is paid 90% in cash and, although they have no contractual obligation, the Directors have agreed that 10% of the
bonus will be deferred into shares, which vest after four years in accordance with the rules of the Long-Term Incentive Plan.
Both the cash and share element of the bonus are subject to clawback where overpayments may be reclaimed in the event
of misstatement or error.
Long-term incentive awards (audited)
Long-term incentives relate to awards granted on 13 April 2021 which vest in April 2024 based on performance over the
three-year period to 31 December 2023. The performance conditions attached to these awards and actual performance
against these conditions are as follows:
Long-term incentive awards: performance outturn
Performance measure Performance condition
Threshold
target Stretch target Actual % vesting
EPS (out of 50%) 25% of award vesting at threshold
up to 100% of award vesting at
stretch on straight-line basis
122p 150p 275p 50
TSR relative to the constituents
of the FTSE 250 Index (excluding
investment trusts) (out of 50%)
25% of award vesting at threshold
up to 100% of award vesting at
stretch on straight-line basis
Median Upper
quartile
Above
upper
quartile
50
Total vesting (out of 100%) 100
The award details for the Executive Directors are as follows:
Long-term incentive awards: vesting outcome
Executive Directors
Number of
options
granted
Number of
options to
vest
Number of
options to
lapse
Estimated
value of
vested
shares
1,2
£000
Andi Case 28,576 28,576 – 884
Jeff Woyda 18,184 18,184 – 563
1 The estimated value of the vested shares is based on the average share price over the three-month period from 1 October 2023 to 31 December
2023 (£28.34). Cash accrued in respect of dividend equivalents payable on vested shares is also included in the estimated value. The awards will
vest on 13 April 2024. The value of the vested shares will be restated based on the actual share price on the date of vesting and disclosed in the
single figure table in the 2024 Annual Report.
2 The awards were granted on 13 April 2021 based on the average share price over the period 8-12 April 2021 (£28.87). The average share price
over the final three months of the financial year was £28.34, and therefore none of the value in vesting awards is attributable to share price
growth. The value of the dividends as a proportion of the total value of award vesting is 8.4% (£74,583 and £47,460 for Andi Case and
Jeff Woyda respectively).
135Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Scheme interests (audited)
The table below sets out the scheme interests held by the Executive Directors.
Further details of share-based payments during the year are included in note 22 to the consolidated financial statements.
Executive share plan participation
Type of award
1
Date of
grant
No. of
shares
under
award
(01/01/23)
Granted
during
2023
Vested
during
2023
2
Lapsed
during
2023
Exercised
during
2023
2
No. of
shares
under
award
(31/12/23)
Face
value
3
% vesting at
threshold
4
Performance
period ends
Vesting
date
Holding
period ends
Andi Case
Deferred
Award 18 Apr 19 8,951 – 8,951 – – – £211,870 N/A N/A 18 Apr 23 N/A
Performance
Award 7 May 20 34,351 – 34,190 161 – 34,190
5
£821,244 25% 31 Dec 22 7 May 23 7 May 25
Deferred
Award 7 May 20 9,952 – – – – 9,952 £239,047 N/A N/A 7 May 24 N/A
Performance
Award 13 Apr 21 28,576 – – – – 28,576 £824,989 25% 31 Dec 23 13 Apr 24 13 Apr 26
Deferred
Award 13 Apr 21 8,253 – – – – 8,253 £238,264 N/A N/A 13 Apr 25 N/A
Performance
Award 19 Apr 22 23,557 – – – – 23,557 £824,966 25% 31 Dec 24 19 Apr 25 19 Apr 27
Deferred
Award 19 Apr 22 13,495 – – – – 13,495 £472,595 N/A N/A 19 Apr 26 N/A
Performance
Award 20 Apr 23 – 26,829 – – – 26,829 £824,992 25% 31 Dec 25 20 Apr 26 20 Apr 28
Deferred
Award 20 Apr 23 – 27,305 – – – 27,305 £839,629 N/A N/A 20 Apr 27 N/A
Jeff Woyda
Deferred
Award 18 Apr 19 2,314 – 2,314 – – – £54,772 N/A N/A 18 Apr 23 N/A
Performance
Award 7 May 20 21,859 – 21,757 102 – 21,757
5
£522,603 25% 31 Dec 22 7 May 23 7 May 25
Deferred
Award 7 May 20 2,573 – – – – 2,573 £61,803 N/A N/A 7 May 24 N/A
Performance
Award 13 Apr 21 18,184 – – – – 18,184 £524,972 25% 31 Dec 23 13 Apr 24 13 Apr 26
Deferred
Award 13 Apr 21 2,134 – – – – 2,134 £61,609 N/A N/A 13 Apr 25 N/A
Performance
Award 19 Apr 22 14,991 – – – – 14,991 £524,985 25% 31 Dec 24 19 Apr 25 19 Apr 27
Deferred
Award 19 Apr 22 3,490 – – – – 3,490 £122,220 N/A N/A 19 Apr 26 N/A
Performance
Award 20 Apr 23 – 17,073 – – – 17,073 £524,995 25% 31 Dec 25 20 Apr 26 20 Apr 28
Deferred
Award 20 Apr 23 – 7,061 – – – 7,0 61 £217,126 N/A N/A 20 Apr 27 N/A
1 Performance Awards are granted as nil-cost options, which lapse 10 years after the date of grant to the extent not previously exercised.
All Performance Awards are subject to performance measures (50% based on relative TSR measured over a three-year performance period
and 50% based on EPS at the end of the performance period).
All Performance Awards have been granted equivalent to 150% of base salary.
Deferred Awards represent a deferral of 10% of bonus and are granted as restricted share awards. Further restricted share awards will be made
to Andi Case and Jeff Woyda in 2024 in respect of the deferral of 10% of their 2023 bonus.
2 Deferred Awards which vested during the year were valued at £347,525 (based on the closing share price on the date of vesting). The Directors
did not exercise any share options during the year.
3 Face value is calculated using the share price used to determine the number of shares under the award as set out below. This share price was
calculated using the average middle market quotation over the three-day period on the dates specified:
– Awards made on 18 April 2019: £23.67 (15-17 April 2019)
– Awards made on 7 May 2020: £24.02 (4-6 May 2020)
– Awards made on 13 April 2021: £28.87 (8-12 April 2021)
– Awards made on 19 April 2022: £35.02 (12-14 April 2022)
– Awards made on 20 April 2023: £30.75 (17-19 April 2023)
4 Assumes that threshold is met in respect of both the TSR and EPS performance measures.
5 These awards were shown as vested in the 2022 Annual Report as, although they formally vested on 7 May 2023, the performance period for
the awards ended on 31 December 2022 and had already been assessed on publication of the 2022 Annual Report. Going forward, disclosure
will reflect the actual date of vesting and the awards therefore also show as vested in this Annual Report.
136 Clarkson PLC
2023 Annual Report
Executive Directors’ interests in share options over ordinary shares under the Company’s all-employee share plans
are as follows:
ShareSave participation
Type of award
Date of
grant
Options held
at 1 January
2023
Options
granted
during
the year
Options
exercised
during
the year
Options
lapsed
during
the year
Options
held at
31 December
2023
Option
price
Normal
exercise
period Face value
1
Jeff Woyda
ShareSave
(option) 1 Oct 21 572 – – – 572 £31.44
1 Nov 24–
30 Apr 25 £17,984
1 Face value calculated using the share price used to determine the number of shares under the award (ie the option price). The option price
shown above was calculated using the average middle market quotation over 2-6 September 2021, after the application of a 20% discount.
Directors’ interests in shares (audited)
In order to further align the interests of the Executive Directors with those of shareholders, the Company has implemented
share ownership guidelines which require Executive Directors to build a shareholding equivalent to 200% of salary. Until this
is met they are required to retain 50% of any share award that vests (on a net of tax basis). The Executive Directors have
both met the guideline levels.
The beneficial interests of the Executive Directors (and their connected persons) in the Company’s shares are set out below:
Executive Directors’ shareholdings
No. of
ordinary shares
% of salary
required to be
held in shares
Unvested LTIPs
(subject to
performance
conditions)
Unvested LTIPs
(performance
conditions
already
assessed)
2
Vested and
unexercised
LTIPs
(no longer
subject to
performance
conditions)
Deferred
bonus awards
1
(subject to
service
conditions)
ShareSave
options
(not subject to
performance
conditions)
2023 31 Dec 23 31 Dec 23 31 Dec 23 31 Dec 23 31 Dec 23 31 Dec 23 31 Dec 23
Andi Case 561,217 200 50,386 28,576 34,190 59,005 –
Jeff Woyda 103,959 200 32,064 18,184 21,757 15,258 572
No. of
ordinary shares
% of salary
required to be
held in shares
Unvested LTIPs
(subject to
performance
conditions)
Unvested LTIPs
(performance
conditions
already
assessed)
3
Vested and
unexercised
LTIPs
(no longer
subject to
performance
conditions)
Deferred
bonus awards
1
(subject to
service
conditions)
ShareSave
options
(not subject to
performance
conditions)
2022 31 Dec 22 31 Dec 22 31 Dec 22 31 Dec 22 31 Dec 22 31 Dec 22 31 Dec 22
Andi Case 556,473 200 52,133 34,351 – 40,651 –
Jeff Woyda 102,733 200 33,175 21,859 – 10,511 572
1 Deferred bonus awards are granted as restricted share awards.
2 Further details regarding the vesting outcome are included on page 135.
3 These awards were shown as vested and unexercised in the 2022 Annual Report as, although they formally vested on 7 May 2023, the
performance period for the awards ended on 31 December 2022 and had already been assessed on publication of the 2022 Annual Report.
Going forward, disclosure will reflect the actual date of vesting and the position as at 31 December 2022 has therefore been restated.
The actual vesting outcome was set out on page 125 of the 2022 Annual Report.
137Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
The beneficial interests of the Non-Executive Directors (and their connected persons) in the Company’s shares
are set out below:
Non-Executive Directors’ shareholdings
31 December
2023
31 December
2022
Martine Bond – –
Sue Harris 1,724 1,724
Laurence Hollingworth 9,000 9,000
Dr Tim Miller 2,640 2,640
Birger Nergaard
1
30,869 30,869
Heike Truol 1,607 1,607
1 Ordinary shares held by Acane AS on behalf of Birger Nergaard and his connected persons.
There have not been any further changes in the beneficial interests of the Directors in the share capital of the Company
between 31 December 2023 and the date of this report.
Pensions (audited)
Andi Case and Jeff Woyda receive a cash supplement (up to 15% of base salary) in lieu of pension (net of employer’s national
insurance contributions), which is included in the single figure table on page 133 as pension. No contributions were paid into
Group pension schemes on their behalf.
Payments to past Directors (audited)
No payments were made during the year ended 31 December 2023 to any person who was not a Director of the Company
at the time payment was made, but who had previously been a Director.
Payments for loss of office (audited)
No payments were made in respect of loss of office during the year ended 31 December 2023.
Details of service contracts and letters of appointment
Details of the current Executive Directors’ service contracts are as follows:
Date of contract Unexpired term Notice period
Andi Case 23 June 2008
1
12 months 12 months
Jeff Woyda 3 October 2006 12 months 12 months
1 The effective date of the contract is 17 June 2008.
The service contracts are available for inspection at the Company’s registered office.
Details of the Non-Executive Directors appointment terms are as follows:
Date of initial
appointment
Date current term
commenced
Unexpired term at
31 December 2023 Notice period
Martine Bond 26 March 2021 26 March 2021 3 months 3 months
Sue Harris 7 October 2020 7 October 2023 33 months 3 months
Laurence Hollingworth
1
23 July 2020 2 March 2022 14 months 3 months
Dr Tim Miller 22 May 2018 22 May 2021 5 months 3 months
Birger Nergaard
2
2 February 2015 2 February 2021 1 month N/A
Heike Truol 31 January 2020 31 January 2023 25 months 3 months
1 Laurence Hollingworth was initially appointed as a Non-Executive Director on 23 July 2020. He entered into a new letter of appointment
on his appointment as Chair with effect from 2 March 2022.
2 Birger Nergaard’s third term was extended to end on 9 May 2024.
Non-Executive Directors are appointed by letter of appointment for a fixed term not exceeding three years, renewable
on the agreement of both the Company and the Director, and are subject to re-election at each AGM. Each appointment can
be terminated before the end of the three-year period with three months’ notice due. Fees payable for a new Non-Executive
Director appointment will take into account the experience of the individual and the current fee structure.
138 Clarkson PLC
2023 Annual Report
Performance graph
This graph compares the total shareholder return (that is, share price growth assuming reinvestment of any dividends)
of £100 invested in the Company’s shares and £100 invested in the FTSE 250 Index, which the Remuneration Committee
considers appropriate for comparison purposes given the Company has been a member of this index over the period.
Clarkson PLC
0
2021 20232017 20192015 2016 2018 2020 202220142013
50
100
150
250
200
FTSE 250
Total remuneration table
The table below shows the total remuneration figure for the CEO for each of the last 10 financial years:
CEO remuneration
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Single total figure
of remuneration
(£000) 11,936 10,154 6,648 3,170 3,265 2,758 4,043 3,706 4,958 4,970
Vested LTIP
(as a % of maximum) 100% 99.53% 100% 18% 30% 0% 30% 15% 70% 69%
139Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Annual change in remuneration of Directors and employees
The table below shows the percentage change in the remuneration of each Director (salary/fees, taxable benefits and annual
bonus) between the 2020, 2021, 2022 and 2023 financial years, compared to the average of those components of pay for all
employees. The Company has chosen to voluntarily disclose this information as Clarkson PLC is not an employing company.
Relative pay
Salary/fee and taxable
benefits increase/decrease
% change
Annual bonus
increase/decrease
% change
2022/23
1
2021/22 2020/21 2019/20 2022/23 2021/22 2020/21 2019/20
Executive Directors
Andi Case +0.26% -0.35% -0.15% +0.61% +24.0% +77.66% +98.34% -0.31%
Jeff Woyda -0.02% -0.002% +0.04% -0.06% +24.0% +77.66% +98.34% -0.31%
Non-Executive Directors
2
Martine Bond
3
+3.86% 0% N/A N/A N /A N /A N/A N/A
Sue Harris
4
+18.82% +8% 0% N /A N/A N/A N /A N /A
Laurence Hollingworth
5
+28.26% +184% 0% N /A N /A N/A N /A N /A
Dr Tim Miller +2.44% 0% 0% 0% N/A N/A N/A N /A
Birger Nergaard +3.86% 0% 0% 0% N /A N/A N /A N/A
Heike Truol
6
+20.33% +8% 0% N /A N /A N/A N /A N /A
Employees
Average employee +2.3% +2.4% +4.17% +3.83% -1.8% +22.4% +14.10% +1.97%
1 The fees for the Chair and the Non-Executive Directors increased with effect from 1 January 2023 and 1 June 2023 respectively.
2 Where a Non-Executive Director has been appointed part-way through a financial year, for the purpose of this calculation their annual fee
has been annualised to enable a meaningful year-on-year comparison.
3 Appointed as a Director with effect from 26 March 2021.
4 Appointed as a Director with effect from 7 October 2020. Sue was appointed as SID with effect from 11 September 2022 and the increases
in her fee in 2022 and 2023 reflect in part the supplemental fee paid in respect of this role.
5 Appointed as a Director with effect from 23 July 2020. Laurence was appointed as Chair with effect from 2 March 2022 and the increases
in his fee in 2022 and 2023 reflect the fee paid in respect of this role.
6 Appointed as a Director with effect from 31 January 2020. Heike was appointed as Employee Engagement Director with effect from
11 September 2022 and the increases in her fee in 2022 and 2023 reflect in part the supplemental fee paid in respect of this role.
CEO pay ratio
The table below shows the pay ratio information in relation to the total remuneration of the CEO compared to the pay
of the Company’s UK employees for 2022. Over time, disclosure over a rolling 10-year period will be built up.
Financial year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2023 Option A 274:1 146:1 84:1
2022 Option A 210:1 121:1 70:1
2021 Option A 131:1 76:1 46:1
2020 Option A 72:1 42:1 25:1
2019 Option A 84:1 49:1 27:1
The Remuneration Committee has selected Option A as the method for calculating the CEO pay ratio. Option A calculates a
single figure for every employee in the year to 31 December 2023 and identifies the employees that fall at the 25th, 50th and
75th percentiles. This method was chosen as it is considered the most accurate way of identifying the relevant employees
and aligns to how the single figure table is calculated.
The Company has included the following elements of pay in its calculation: annual basic salary, allowances, bonuses (cash
and shares), commission payments, employer’s pension contributions and P11D benefits. These pay elements were separated
into recurring, bonus and benefit components. The recurring components were scaled relative to the proportion of 2023
worked by each individual employee. This year, bonus pay elements have been scaled relative to the full-time equivalent
of part-time employees. The scaled recurring pay elements and bonuses were then added to the benefits value.
This resulted in a single figure for each employee, from which the individuals at the 25th, 50th and 75th percentiles could
be identified. The Remuneration Committee believes the median pay ratio for 2023 to be consistent with the reward policies
for the Company’s UK employees taken as a whole. UK-based employees have been selected as the most appropriate
comparator as the CEO is a full-time UK-based employee.
The table below sets out the total pay and benefits for individuals at the 25th, 50th and 75th percentiles, and the salary
element within this.
Financial year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2023 Total pay and benefits £40,000 £76,000 £132,000
Salary element of total pay and benefits £40,000 £49,000 £100,000
140 Clarkson PLC
2023 Annual Report
Relative importance of spend on pay
The following table compares the total remuneration paid in respect of all employees of the Group in 2022 and 2023 and
distributions made to shareholders in the same years:
2023
£m
2022
£m % change
Dividends 28.3 25.9 9%
Employee remuneration costs, of which: 416.3 390.0 7%
– Executive Directors’ total pay excluding LTIP 14.1 11.6 22%
– Executive Directors’ annual bonus 13.1 10.6 24%
Read more:
Engagement with employees on remuneration on pages 84 and 112.
Conflicts of interest
In order to avoid any conflict of interest, remuneration is managed through well-defined processes ensuring no individual
is involved in the decision-making process related to their own remuneration. In particular, the remuneration of all Executive
Directors is set and approved by the Committee; and none of the Executive Directors are involved in the determination
of their own remuneration arrangements. The Committee also receives support from external advisors and evaluates
the support provided by those advisors annually to ensure that advice is independent, appropriate and cost effective.
The Committee exercises its own judgement in considering such advice.
External advisor
Following an external selection process, the Remuneration Committee appointed FIT Remuneration Consultants LLP (‘FIT’)
as its advisor in October 2018. FIT provides no other services to the Group, has no further connection with the Company
or individual Directors and is a signatory to the Remuneration Consultants Group’s Code of Conduct. The Remuneration
Committee reviews the effectiveness of its advisor on an annual basis. It is satisfied that the quality of advice received
during the year was sufficient and that the advice provided by FIT is objective and independent.
The fees paid by the Company to FIT during the financial year for advice to the Remuneration Committee and in relation
to share plans were £54,987 (2022: £31,472). Fees were charged on a time spent basis.
Statement of shareholder voting at AGM
The following votes were received from shareholders at the last AGM at which the relevant resolutions were proposed:
Date of meeting In favour % cast Against % cast Withheld
Remuneration Policy 11 May 2023 12,092,273 56.27 9,395,816 43.73 1,497,061
Remuneration Report 11 May 2023 12,103,220 56.31 9,392,293 43.69 1,489,637
Details of the actions taken by the Board in response to the votes against the resolution in respect of the Remuneration
Report registered at the 2023 AGM are included in the Remuneration Committee Chair’s statement on pages 129 to 131.
This report was approved by the Board and signed on its behalf by:
Dr Tim Miller
Remuneration Committee Chair
1 March 2024
141Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Remuneration Report continued
Appendix: Directors’ Remuneration Policy
We include the main tables from the shareholder-approved Directors’ Remuneration Policy (the ‘Policy’). A full version of the
Policy (which was approved by shareholders on 11 May 2023) can be found in the 2022 Annual Report (available on our website
at www.clarksons.com).
As indicated in previous reports, the Remuneration Committee (the ‘Committee’) recognises that listed company practice
as regards their Executive Directors has changed over the years and that, for any new appointments to the Board, the Policy
will be broadly consistent with current market practice. While there are no current plans to appoint a new Executive Director,
the Committee confirms that any new appointments under the proposed Policy will also be subject to the following:
– Capping the annual bonus opportunity;
– Deferring a greater proportion of the annual bonus;
– Compensation for fixed pay only on severance;
– No enhancement on a change of control;
– The rate of any employer pension contributions will be aligned with that available to the majority of the wider workforce
in the UK (or any other country in which the executive is based).
For any new Executive Director appointments, the Policy should be read as incorporating such additional requirements.
In addition, the Committee will consider at the time other developments in market practice when constructing such an offer.
Purpose and link to strategy Operation Maximum opportunity Performance framework
Base salary – To attract and retain
high performing
Executive Directors
who are critical for
the business
– Set at a level to provide
a core reward for the
role and cover essential
living costs
– Normally reviewed
annually
– Paid monthly
– Salaries are determined
taking into account:
– the experience,
responsibility,
effectiveness and
market value of
the executive
– the pay and
conditions in
the workforce
– There is no prescribed
maximum annual
increase. The
Committee is guided
by the general increase
for the broader
workforce but on
occasion may
recognise an increase
in certain
circumstances, such
as assumed additional
responsibility or an
increase in the scale
or scope of the role or,
in the case of a new
executive, a move
towards the desired
rate over a period of
time where salary was
initially set below the
intended positioning
n/a
Benefits – To provide a market
standard suite of basic
benefits in kind to
ensure the Executive
Directors’ well-being
– Taxable benefits
may include:
– car allowance
– healthcare insurance
– club membership
– Participation in
HMRC-approved (or
equivalent) schemes
– Other benefits may
be payable where
appropriate
– Any reasonable
business-related
expenses (including
tax thereon) may
be reimbursed if
determined to be
a taxable benefit
– A car allowance in line
with market norm. The
value of other benefits
is based on the cost
to the Company and
is not predetermined
– HMRC (or equivalent)
scheme participation
up to prevailing
scheme limits
n/a
142 Clarkson PLC
2023 Annual Report
Purpose and link to strategy Operation Maximum opportunity Performance framework
Annual
bonus
(including
deferred
shares)
– To reward significant
annual profit
performance
– To ensure that the
bonus plan is
competitive with
our peers. As a result,
bonus forms a
significant proportion
of the remuneration
package
– To ensure that if there
is a reduction in
profitability, the level
of bonus payable falls
away sharply
– 90% of the bonus
is paid in cash and,
although they have no
contractual obligation,
the Executive Directors
have agreed that 10%
of annual bonus
payable is deferred
in shares, vesting after
four years
– Executive Directors
have voting rights
and receive dividends
on deferred shares
– Performance criteria
are reviewed and
recalibrated carefully
each year to ensure
they are linked to
strategic business
goals, take full account
of economic
conditions, and are
sufficiently demanding
to control the total
bonus pool and
individual allocations
– Clawback provision
operates for
overpayments due to
misstatement or error
– In line with Clarksons’
peers, the annual
bonus is not subject
to a formal individual
cap. This policy, which
is contractual for the
current Chief Executive
Officer and Chief
Financial Officer
& Chief Operating
Officer, encourages the
maximisation of profit,
and ensures that
Executive Directors
are aligned with all
stakeholders in
the business
– Bonus is determined
by Group performance
measured over one year
on the following basis:
– below a ‘profit floor’
set by the Committee
each year, no bonus
is triggered
– above the floor, an
escalating percentage
of profits is payable
into a bonus pool for
progressively higher
profit before tax
performance
– profit for bonus
calculations may
be adjusted by the
Committee where
appropriate and does
not include business
that has not been
invoiced
– for Executive Directors
with revenue-generating
broking responsibilities,
a further key
determinant of the
annual bonus is the
significance of
personally-generated
broking revenues
– a proportion of
an individual’s share
of the bonus pool
may be based on
the achievement of
personal objectives set
by the Committee at
the start of the year
Long-term
incentives
– To incentivise and
reward significant
long-term financial
performance and share
price performance
relative to the
stock market
– To encourage share
ownership and provide
further alignment with
shareholders
– Awards are
performance-related
and are normally
structured as nil
cost options
– Awards are granted
each year following
the publication of
annual results
– Clawback provision
operates for
overpayments due to
misstatement or error
– Annual maximum limit
of 150% of base salary
for awards subject to
long-term performance
targets (200% of base
salary in exceptional
circumstances)
– Dividend equivalents
(in cash or shares) may
accrue between grant
and vesting/expiry
of any holding period,
to the extent that
shares under award
ultimately vest
– Currently, the awards are
subject to performance
conditions measured
on a combination of
three-year EPS growth
and relative TSR
– The Committee may
introduce new measures
or reweight the current
EPS and TSR
performance measures
so that they are directly
aligned with the
Company’s strategic
objectives for each
performance period
– Normally measured over
a three-year
performance period
– 25% of an award will
vest for achieving
threshold performance,
increasing pro-rata to
full vesting for the
achievement of stretch
performance targets
143Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Remuneration Report continued
Appendix: Directors’ Remuneration Policy continued
Purpose and link to strategy Operation Maximum opportunity Performance framework
Pension – To provide a
market-competitive
pension arrangement
– Executive Directors
participate in a
Company defined
contribution pension
scheme and/or receive
a cash allowance in lieu
of pension contributions
– Employer contributions
are up to 15% of basic
salary or an equivalent
cash allowance net
of employer’s national
insurance contributions
n/a
Non-
Executive
Directors’
fees
– To attract and
retain high calibre
Non-Executive
Directors through the
provision of market
competitive fees
– Reviewed annually
– Paid monthly
– Fees are determined
taking into account:
– the experience,
responsibility,
effectiveness and
time commitments
of the Non-Executive
Directors
– the pay and
conditions in
the workforce
– Additional fees may
be payable in relation
to extra responsibilities
undertaken such
as chairing a Board
Committee and/or
a Senior Independent
Director role or being a
member of a Committee
– Any reasonable
business-related
expenses (including
tax thereon) can
be reimbursed if
determined to be
a taxable benefit
– As for the Executive
Directors, there is no
prescribed maximum
annual increase
– Fee increases
are guided by the
general increase for
the broader workforce
but on occasion may
recognise an increase
in certain
circumstances, such
as assumed additional
responsibility or an
increase in the scale
or scope of the role
n/a
Share
ownership
guidelines
– To provide alignment
between the
longer-term interests
of Directors and
shareholders
– Executive Directors
are expected to build
up and maintain
shareholdings
in the Company
– Executives are required
to retain at least half
of the net of tax vested
number of shares
awarded and received
until the guideline has
been achieved
– Chief Executive Officer:
200% of salary
– Other Executive
Directors: 200%
of salary
n/a
144 Clarkson PLC
2023 Annual Report
Directors’ Report
The Directors present their Report and the audited consolidated financial statements for the year ended 31 December 2023.
The Directors’ Report and the Strategic Report (pages 10 to 101) together constitute the Management Report for the purpose
of Rule 4.1.8R of the Disclosure Guidance and Transparency Rules. Other information relevant to the report, including
information required pursuant to the Companies Act 2006 and UK Listing Rule 9.8.4R, is incorporated below by reference.
Detail Section Location
Information
incorporated
by reference
As permitted by the
Companies Act 2006,
the disclosures to the
right, which are included
in the Strategic Report,
are incorporated into
the Directors’ Report
by reference:
An indication of likely future developments in the business
of the Company and its subsidiary undertakings.
Strategic
Report
Pages 12 to 15
and 32 to 57
An indication of the activities of the Company and
its subsidiary undertakings in the field of research
and development.
Strategic
Report
Pages 12 to 15
and 24 to 57
Employment of disabled persons. Strategic
Report
Page 85
Employee engagement (including participation
in share plans).
Strategic
Report
Pages 84 and
85, 112 and 113,
and 131
Engagement with suppliers, customers and others. Strategic
Report
Pages 58 to 61
The Company is
required to disclose
certain information
under Listing Rule 9.8.4R
in the Directors’ Report
or advise where such
information is set out.
The information can be
found in the sections of
the 2023 Annual Report
set out to the right:
Details of long-term incentive schemes. Directors’
Remuneration
Report
Pages 132
to 144
Any waiver of emoluments by a Director of the Company
or any subsidiary undertaking.
Directors’
Remuneration
Report
Page 129
Directors The names and biographical details of the Directors who
served on the Board and Board Committees during the
year, including changes that have occurred during the year
and up to the date of this report, are shown in the Corporate
Governance Report and incorporated into the Directors’
Report by reference.
Corporate
Governance
Report
Pages 104
to 107
Appointment and
retirement of Directors
The Company’s Articles of Association, the Code, the
Companies Act 2006 and related legislation govern the
appointment and retirement of Directors.
In accordance with the Code and the Company’s Articles
of Association, all Directors are subject to election by
shareholders at the first AGM following their appointment,
and subject to annual re-election thereafter. The 2024
Notice of AGM sets out the reasons why the Board believes
each Director should be re-elected.
Corporate
Governance
Report
Page 117
Directors’ powers Subject to relevant company law and the Company’s
Articles of Association, the Directors may exercise
all powers of the Company. Further details regarding
authorities in relation to the allotment of shares and
the repurchase of shares are set out on the next page.
Directors’ insurance
and indemnities
Directors’ and officers’ liability insurance was maintained
by the Company throughout 2023 and to the date of this
report. Qualifying indemnity provisions are in place for
the benefit of the Non-Executive Directors.
Directors’ interests The interests of the Directors and their connected persons
in the Company’s shares are set out in the Directors’
Remuneration Report.
Directors’
Remuneration
Report
Pages 137
and 138
145Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Report continued
Detail Section Location
Share capital At 31 December 2023, the Company’s issued share capital
consisted of 30,725,498 ordinary shares of £0.25 each.
Further details on the issued share capital, including any
changes during the year, can be found in the notes to
the financial statements.
Note 24 to the
consolidated
financial
statements
Page 191
Rights attaching
to shares
All ordinary shares have equal voting rights, including the
right to one vote at a general meeting, to receive an equal
proportion of any dividends declared and paid, and to an
equal amount of any surplus assets distributed in the event
of a winding-up.
There are no restrictions on the transfer of the Company’s
ordinary shares or on the exercise of voting rights attached
to them, other than:
– where the Company has exercised its right to suspend
their voting rights or prohibit their transfer following the
omission by their holders or any person interested in them
to provide the Company with information requested by
it in accordance with Part 22 of the Companies Act 2006;
– where the holder is precluded from exercising voting
rights by the Financial Conduct Authority’s Listing Rules
or the City Code on Takeovers and Mergers; and
– pursuant to the Company’s share dealing rules where
the Directors and designated employees require approval
to deal in the Company’s shares.
The Company is not aware of any further agreements
between shareholders that may result in restrictions
on the transfer of securities and/or voting rights.
Authority to allot shares The Company requests authority from shareholders for
the Directors to allot shares on an annual basis, and a similar
resolution will be proposed at the 2024 AGM. At the 2023
AGM, the Directors were authorised to allot shares up to an
aggregate nominal amount of £2,552,789 or up to £5,105,578
in connection with a rights issue, and were empowered to
allot equity securities for cash on a non-pre-emptive basis
up to an aggregate nominal amount of £765,836. In line
with the Pre-Emption Group’s updated Statement of
Principles, published in November 2022, the Company
will request authority from shareholders at the 2024 AGM
to allot equity securities for cash on a non-pre-emptive
basis up to 10% of the issued ordinary share capital (to be
determined at the latest practicable date before publication
of the Notice of Meeting).
Purchase of own shares At the 2023 AGM, the Company obtained shareholder
approval to purchase up to 3,063,347 of its own ordinary
shares of £0.25 each (representing 10% of its issued share
capital). No shares were purchased under this authority
during the year.
At the 2024 AGM, the Directors will again seek authority
to purchase the Company’s own shares.
Employee share
scheme rights
The Company has established an Employee Benefit Trust
(‘EBT’) for the purpose of facilitating the operation of the
Company’s share plans. The EBT waives any voting rights
and dividends that may be declared in respect of such
shares which have not been allocated for the settlement of
awards made under the Company’s share plans. Employees
may direct the EBT as to how to exercise voting rights over
shares in which they have a beneficial interest.
146 Clarkson PLC
2023 Annual Report
Detail Section Location
Substantial
shareholders
As of 31 December 2023, the Company had been notified
under the Disclosure Guidance and Transparency Rules
of the following holdings of voting rights in its issued
share capital:
Shareholder
% of total
voting rights
disclosed
Royal London Asset Management Ltd 6.17
FMR LLC 4.86
RS Platou Holding AS 4.85
Montanaro Asset Management Limited 3.19
Invesco Ltd. 3.18
The Company has not received any further notifications
between 31 December 2023 and the date of this report.
Significant agreements The service contracts of the CEO and CFO & COO include
provisions regarding a change of control of the Company.
Further details are included in the Directors’ Remuneration
Policy (which is available on the Company’s website in
the 2022 Annual Report). There are no further agreements
between any Group company and any of its employees
or any Director of any Group company which provide for
compensation to be paid to an employee or a Director for
termination of employment or for loss of office as a
consequence of a takeover of the Company.
There are no significant agreements to which the Company
is a party that take effect, alter or terminate upon a change
of control following a takeover bid for the Company.
2022 Annual
Report
Page 137
Dividend The Directors recommend a final dividend of 72p per
ordinary share for the year ended 31 December 2023.
Subject to shareholder approval at the AGM, the final
dividend will be paid on 24 May 2024 to shareholders
on the register at the close of business on 10 May 2024.
The interim dividend paid during the year was 30p which,
together with the final dividend, will provide a total dividend
of 102p per ordinary share for the year (2022: 93p).
External Auditor The Board recommends that PricewaterhouseCoopers LLP
(‘PwC’) be reappointed as the Company’s External Auditor
with effect from the 2024 AGM, at which resolutions
regarding PwC’s reappointment and to authorise the
Board to set their remuneration will be proposed.
Audit and Risk
Committee
Report
Pages 123
to 125
Articles of Association The Company’s Articles of Association were adopted at the
2019 AGM. Any amendments to the Articles of Association
can only be made by a special resolution at a general
meeting of shareholders.
Political donations The Group did not make any political donations or incur
any political expenditure in the UK or the EU during 2023.
Financial instruments Our risk management objectives and policies in relation
to the use of financial instruments can be found in the
notes to the consolidated financial statements.
Note 28 to the
consolidated
financial
statements
Pages 194
to 196
Emissions reporting Details relating to required emissions reporting are set out
within the Our impact section.
Our impact Pages 82
and 83
Corporate Governance
statement
The Corporate Governance Report is incorporated by
reference into this Directors’ Report and includes details
of our compliance with the Code and how the Company
has applied the main Principles. The Corporate Governance
Report also includes a description of the Group Diversity
and Inclusion Policy, which incorporates Board diversity.
Corporate
Governance
Report
Pages 102
to 144
147Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Directors’ Report continued
Detail Section Location
Internal control and risk
management systems
A description of the main features of the Group’s internal
control and risk management systems in relation to the
financial reporting process can be found in the
Strategic Report.
Strategic
Report
Pages 64
to 73
Annual General Meeting The 2024 AGM will be held electronically by video webcast
on 9 May 2024. Details of the resolutions to be proposed
are set out in a separate Notice of Meeting, which will
be posted to those shareholders who receive hard copy
documents and which will be available on the Group’s
website for those who have elected to receive
documents electronically.
Corporate
Governance
Report
Page 113
Events since the
balance sheet date
In February 2024, the Company’s wholly owned subsidiary,
Gibb Group Ltd, acquired the entire share capital of Trauma
& Resuscitation Services Limited.
There are no other material items to report.
Note 27 to the
consolidated
financial
statements
Page 193
Disclosure
of information
to the Auditor
Each of the Directors who held office at the date
of approval of this Directors’ Report confirms that,
so far as each Director is aware, there is no relevant audit
information of which the Company’s Auditor is unaware;
and each Director has taken all steps that ought to have
been taken to make himself/herself aware of any relevant
audit information and to establish that the Company’s
Auditor is aware of that information.
Statutory details
for Clarkson PLC
The Company is a public company limited by shares,
incorporated in the United Kingdom and registered
in England and Wales with registered number 01190238.
Its registered office is at Commodity Quay,
St Katharine Docks, London E1W 1BF.
The Company’s shares are listed on the London Stock
Exchange under the ticker CKN, and the Company is
a constituent of the FTSE 250. It has no ultimate parent
company, and details of the Company’s substantial
shareholders (as notified to the Company under
the Disclosure Guidance and Transparency Rules)
are set out on page 147.
Directors’
Report
Page 147
Branches A number of the Company’s subsidiary undertakings
maintain branches outside of the UK.
Note W to
the Parent
Company
financial
statements
Pages 213
to 218
By order of the Board:
Deborah Abrehart
Group Company Secretary
1 March 2024
148 Clarkson PLC
2023 Annual Report
Directors’ Responsibilities Statement
The Directors are responsible for
preparing the Annual Report and the
financial statements in accordance
with applicable law and regulation.
Company law requires the Directors
to prepare financial statements for
each financial year. Under that law
the Directors have prepared the
Group and the Parent Company
financial statements in accordance
with UK-adopted international
accounting standards.
Under company law, directors must
not approve the financial statements
unless they are satisfied that they
give a true and fair view of the state
of affairs of the Group and Parent
Company and of the profit or loss of
the Group for that period. In preparing
the financial statements, the Directors
are required to:
– select suitable accounting policies
and then apply them consistently;
– state whether applicable
UK-adopted international accounting
standards have been followed,
subject to any material departures
disclosed and explained in the
financial statements;
– make judgements and accounting
estimates that are reasonable and
prudent; and
– prepare the financial statements
on the going concern basis unless
it is inappropriate to presume that
the Group and Parent Company
will continue in business.
The Directors are responsible for
safeguarding the assets of the Group
and Parent Company and hence for
taking reasonable steps for the
prevention and detection of fraud
and other irregularities.
The Directors are also responsible for
keeping adequate accounting records
that are sufficient to show and explain
the Group’s and Parent Company’s
transactions and disclose with
reasonable accuracy at any time the
financial position of the Group and
Parent Company and enable them
to ensure that the financial statements
and the Directors’ Remuneration
Report comply with the Companies
Act 2006.
The Directors are responsible for
the maintenance and integrity of the
Parent Company’s website. Legislation
in the United Kingdom governing the
preparation and dissemination of
financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the
Annual Report, taken as a whole,
is fair, balanced and understandable
and provides the information
necessary for shareholders to assess
the Group’s and Parent Company’s
position and performance, business
model and strategy.
Each of the Directors, whose names
and functions are listed in the Corporate
Governance Report in this Annual
Report confirm that, to the best
of their knowledge:
– the Group and Parent Company
financial statements, which have
been prepared in accordance with
UK-adopted international accounting
standards, give a true and fair view
of the assets, liabilities and financial
position of the Group and Parent
Company, and of the profit of
the Group; and
– the Strategic Report includes
a fair review of the development
and performance of the business
and the position of the Group and
Parent Company, together with
a description of the principal risks
and uncertainties that it faces.
In the case of each Director in office
at the date the Directors’ Report
is approved:
– so far as the Director is aware,
there is no relevant audit information
of which the Group’s and Parent
Company’s Auditor is unaware; and
– they have taken all the steps that
they ought to have taken as a
Director in order to make themselves
aware of any relevant audit
information and to establish that
the Group’s and Parent Company’s
Auditor is aware of that information.
Laurence Hollingworth
Chair
1 March 2024
149Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Independent auditors’ report to the
members of Clarkson PLC
Report on the audit of
the financial statements
Opinion
In our opinion, Clarkson PLC’s Group
financial statements and Parent
Company financial statements
(the “financial statements”):
– give a true and fair view of the state
of the Group’s and of the Parent
Company’s affairs as at 31 December
2023 and of the Group’s profit and
the Group’s and Parent Company’s
cash flows for the year then ended;
– have been properly prepared
in accordance with UK-adopted
international accounting standards
as applied in accordance with
the provisions of the Companies
Act 2006; and
– have been prepared in accordance
with the requirements of the
Companies Act 2006.
We have audited the financial
statements, included within the 2023
Annual Report (the “Annual Report”),
which comprise: the Consolidated and
Parent Company balance sheets as at
31 December 2023; the Consolidated
income statement and the Consolidated
statement of comprehensive income,
the Consolidated and Parent Company
cash flow statements and the
Consolidated and Parent Company
statements of changes in equity for
the year then ended; and the notes to
the financial statements, which include
a description of the significant
accounting policies.
Our opinion is consistent with
our reporting to the Audit and
Risk Committee.
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK)
are further described in the Auditors’
responsibilities for the audit of the
financial statements section of our
report. We believe that the audit
evidence we have obtained is sufficient
and appropriate to provide a basis for
our opinion.
Independence
We remained independent of the
Group in accordance with the ethical
requirements that are relevant to our
audit of the financial statements in the
UK, which includes the FRC’s Ethical
Standard, as applicable to listed public
interest entities, and we have fulfilled
our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and
belief, we declare that non-audit
services prohibited by the FRC’s
Ethical Standard were not provided.
Other than those disclosed in note 3,
we have provided no non-audit
services to the Parent Company or its
controlled undertakings in the period
under audit.
Our audit approach
Overview
Audit scope
– Our audit included full scope audits
of seventeen components (two of
which are individually financially
significant). This gave us coverage
of 87% (2022: 87%) of the Group’s
underlying absolute profit before
taxation and 70% (2022: 72%) of
the Group’s revenue. There were
no significant changes to the Group’s
operations during the year.
Key audit matters
– Risk of impairment of trade
receivables (Group)
– Carrying value of goodwill (Group)
– Carrying value of investments in
subsidiaries (Parent Company)
Materiality
– Overall Group materiality:
£5,400,000 (2022: £5,000,000)
based on 5% of profit before
taxation, adjusted for exceptional
items and acquisition related costs
(‘underlying profit before taxation’).
– Overall Parent Company materiality:
£3,312,000 (2022: £3,161,000)
based on 1% of total assets.
– Performance materiality: £4,050,000
(2022: £3,065,250) (Group) and
£2,484,000 (2022: £2,370,750)
(Parent Company).
The scope of our audit
As part of designing our audit, we
determined materiality and assessed
the risks of material misstatement
in the financial statements.
Key audit matters
Key audit matters are those matters
that, in the auditors’ professional
judgement, were of most significance
in the audit of the financial statements
of the current period and include the
most significant assessed risks of
material misstatement (whether or
not due to fraud) identified by the
auditors, including those which had
the greatest effect on: the overall audit
strategy; the allocation of resources in
the audit; and directing the efforts of
the engagement team. These matters,
and any comments we make on the
results of our procedures thereon,
were addressed in the context of
our audit of the financial statements
as a whole, and in forming our opinion
thereon, and we do not provide a
separate opinion on these matters.
This is not a complete list of all risks
identified by our audit.
The key audit matters below are
consistent with last year.
150 Clarkson PLC
2023 Annual Report
Key audit matter How our audit addressed the key audit matter
Risk of impairment of trade receivables (Group)
Refer to note 15 of the financial statements and note 2 for
the Directors’ disclosures of the related accounting policies,
critical accounting judgements and estimates for further
information.
The Group had trade receivables of £143.6m (2022: £146.8m)
before a loss allowance for expected credit losses of £21.9m
(2022: £19.6m). The macroeconomic environment means
the Group has experienced uncertainty over the
collectability of trade receivables from specific customers.
Management applies the requirements of IFRS 9 ‘Financial
Instruments’ to determine the loss allowance for expected
credit losses. The determination as to whether a trade
receivable is recoverable and the measurement of any
expected credit loss involves judgement. Specific factors
which management considers include the age of the
balance, location and known financial condition of certain
customers, existence of disputes, recent historical payment
patterns and any other available information concerning the
creditworthiness of the counterparty.
Management uses this information to determine whether
a loss allowance for impairment is required, either for
expected credit losses on a specific transaction or
for a customer’s balance overall.
For certain customers there is no net recognition of revenue
where doubt exists as to the ability to collect any
consideration at the time of invoicing.
We focused on the risk of impairment in trade receivables
because it requires a high level of management judgement
and the materiality of the amounts involved.
Our audit procedures included:
– For specific allowances for expected credit losses, we
selected a sample of items and understood management’s
rationale for why an impairment was required. The
impairments relate to customers in default, administration
or legal disputes or those where no net revenue is
recognised from the outset due to doubt regarding
collectability of consideration at the time of invoicing;
– Verifying whether payments had been received since
the year end, reviewing historical payment patterns
and inspecting any correspondence with customers
on expected settlement dates;
– The remaining trade receivables which were not
specifically impaired were subject to management’s
calculation of an expected credit loss. We examined
and tested source data and the mathematical accuracy
of management’s supporting calculations; this included
consideration of the amount of prior years’ loss allowance
that had been utilised for bad debt write-offs during the
year and also the history of current receivables reaching
default or extended overdue positions; and
– We tested adjustments made by management to reflect
certain market conditions, in terms of both the Group’s
markets and the territories where the receivables are due.
From the work we performed, we consider the expected
credit losses to be consistent with the evidence obtained.
151Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Key audit matter How our audit addressed the key audit matter
Carrying value of goodwill (Group)
Refer to note 13 of the financial statements and note 2 for
the Directors’ disclosures of the related accounting policies,
critical accounting judgements and estimates for further
information.
The goodwill balance is allocated across several cash
generating units (CGUs) and is subject to an annual
impairment test. Management prepared a value-in-use
model (‘discounted cash flow’) to estimate the present
value of forecast future cash flows for each CGU. This was
then compared with the carrying value of the net assets
of each CGU (including goodwill) to determine if there
was an impairment.
Determining if an impairment charge is required for
goodwill involves significant judgements about forecast
future performance and cash flows of the CGUs. It also
involves determining an appropriate discount rate and
long-term growth rate. The risk that we focused on during
the audit was whether the goodwill in the Offshore broking
and Securities CGUs is recoverable and that an impairment
charge may be required.
The Offshore broking and Securities CGUs have carrying
values of £50.6m and £15.7m respectively, including goodwill.
Management’s impairment test determined that the
recoverable amount of the CGUs was higher than the
carrying value. As a result, no charge for impairment of
goodwill has been recognised in the current financial year.
We focused on this matter due to the size of the balance
and the significant judgements and estimation involved
to determine whether the carrying value of goodwill
is supportable.
Our audit procedures included:
– For the Offshore broking and Securities CGUs, we
obtained management’s annual impairment assessment
and verified the mathematical accuracy of the
calculations and that the methodology used was in line
with the requirements of IAS 36 ‘Impairment of Assets’;
– We compared the forecasts used in the impairment
model to the latest Board approved budget and
management forecasts and obtained and evaluated
corroborative evidence supporting the future cash flow
forecasts of the Offshore broking and Securities CGUs.
We compared the prior year budget to actual results in
order to assess the historical forecasting accuracy of the
business. We also considered available market data to
challenge the significant assumptions used by
management to determine the future cashflow forecasts;
– We challenged the reasonableness of the discount rates
by comparing the cost of capital for the Offshore broking
and Securities CGUs with comparable organisations and
consulting with our own valuation experts; We considered
the long-term cyclical performance of the Offshore
broking and Securities CGUs and verified that this had
been appropriately factored into the long-term forecasts;
and We challenged the extent to which climate change
considerations had been reflected, as appropriate, in
management’s impairment modelling process.
We found the Directors’ assumptions to be supportable.
We also performed sensitivity analysis on the key drivers
of the cash flow projections including assumed profits
and long-term growth rates. We assessed the disclosures
made in note 14 regarding the related assumptions and
sensitivities and concluded these appropriately draw
attention to the significant areas of estimation uncertainty.
Independent auditors’ report to the
members of Clarkson PLC continued
152 Clarkson PLC
2023 Annual Report
Key audit matter How our audit addressed the key audit matter
Carrying value of investments in subsidiaries (Parent)
Refer to notes A and F of the Parent Company financial
statements for the Directors’ disclosure of the related
accounting policies, critical accounting judgements and
estimates for further information.
In assessing for impairment triggers, management
considers if the underlying net assets of an investment
support the carrying amount. Where the carrying amount
exceeds the net asset value of the subsidiary, an estimation
of the value-in-use of the subsidiary is required. The
value-in-use calculation requires estimation of future cash
flows expected to arise for the subsidiary, the selection of
suitable discount rates and the estimation of future growth
rates. As determining such assumptions is inherently
judgemental and subject to future factors, there is the
potential these may differ in subsequent periods and
materially change the conclusions reached.
Based on management’s assessment, no impairment in
respect of the carrying value of investments in subsidiaries
was identified as at 31 December 2023.
We focused on this matter due to the size of the balance
and the significant judgement and estimation involved
to determine whether the carrying value of investments
in subsidiaries is appropriate in the Parent Company
balance sheet.
We obtained management’s impairment of investment in
subsidiaries assessment with supporting computations and:
– We verified that the assessment model and its inputs
were mathematically accurate and, where appropriate,
consistent with the goodwill impairment test set out
in the key audit matter above;
– We compared the investment values against the net
assets of the investments to identify whether the carrying
amounts were supported by the net asset positions of the
subsidiaries. Where the carrying amounts exceeded the
net asset values of the subsidiaries, our procedures were
focused on management’s value in use calculations
including evaluation of key assumptions used.
As a result of our work, we are satisfied that management’s
assessment is appropriate and that there are no indicators
of impairment in respect of the carrying value of the Parent
Company’s investments in subsidiaries as at 31 December
2023. We evaluated the disclosures made in note F and
found that sensitivity disclosures appropriately draw
attention to the significant areas of estimation uncertainty.
How we tailored the audit scope
We tailored the scope of our audit
to ensure that we performed enough
work to be able to give an opinion on
the financial statements as a whole,
taking into account the structure of
the Group and the Parent Company,
the accounting processes and
controls, and the industry in
which they operate.
The financial statements are
a consolidation of components,
comprising the Group’s operating
businesses and centralised functions.
In establishing the overall approach
to the Group audit, we determined
the type of work that needed to be
performed at the components by
us, as the Group engagement team,
or by component auditors of other
PwC network firms and other firms
operating under our instruction.
Where the work was performed by
component auditors, we determined
the level of involvement we needed
to have in the audit work at those
components to be able to conclude
whether sufficient appropriate audit
evidence had been obtained as a
basis for our opinion on the financial
statements as a whole. Our audit
included full scope audits of seventeen
components (two of which are
individually financially significant).
This gave us coverage of 87%
(2022: 87%) of the Group’s underlying
absolute profit before taxation and
70% (2022: 72%) of the Group’s
revenue. The individually financially
significant components were based in
the UK and Norway. Our work included
directly auditing the largest UK
component and receiving reporting
from our component audit teams.
This, together with the additional
procedures performed centrally at
the Group level, including testing the
consolidation process, gave us the
evidence we needed for our opinion
on the financial statements as a whole.
The impact of climate risk
on our audit
As part of the audit, we have
considered the Group’s risk
assessment process in identifying
climate-related risks and their impact
on the Group’s business, which was
supported by an external sustainability
consultant engaged by management.
The procedures we undertook
included obtaining an understanding
of how management has considered
the impact of their identified
climate-related risks in the underlying
assumptions and estimates used
within the Group’s and Parent
Company’s financial statements.
We challenged the completeness of
management’s climate risk assessment
and specifically considered how
climate-related risks might impact
the significant assumptions made
by management in determining the
future cashflow forecasts used in
their assessment of the carrying
value of goodwill. We assessed the
estimates and assumptions made by
management in preparing the financial
statements and did not identify any
material impact as a result of climate
risk on the Group’s and Parent
Company’s financial statements.
We also considered the consistency
of the disclosures in relation to climate
risk in the other information within
the Annual Report (including the
disclosures in the Task Force on
Climate-Related Financial Disclosures
(‘TCFD’) section) with the financial
statements and our knowledge
obtained from the audit. Our
responsibility over other information
is further described in the Reporting
on other information section of
our report.
153Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
For each component in the scope
of our Group audit, we allocated
a materiality that is less than our
overall Group materiality. The
range of materiality allocated across
components was between £25,000
and £3,312,000. Certain components
were audited to a local statutory audit
materiality that was also less than our
overall Group materiality.
We use performance materiality to
reduce to an appropriately low level
the probability that the aggregate
of uncorrected and undetected
misstatements exceeds overall
materiality. Specifically, we use
performance materiality in determining
the scope of our audit and the nature
and extent of our testing of account
balances, classes of transactions and
disclosures, for example in determining
sample sizes. Our performance
materiality was 75% (2022: 75%)
of overall materiality, amounting to
£4,050,000 (2022: £3,065,250) for
the Group financial statements and
£2,484,000 (2022: £2,370,750) for the
Parent Company financial statements.
In determining the performance
materiality, we considered a number of
factors – the history of misstatements,
risk assessment and aggregation risk
and the effectiveness of controls
– and concluded that an amount at
the upper end of our normal range
was appropriate.
We agreed with the Audit and
Risk Committee that we would report
to them misstatements identified
during our audit above £270,000
(Group audit) (2022: £250,000) and
£165,600 (Parent Company audit)
(2022: £158,050) as well as
misstatements below those amounts
that, in our view, warranted reporting
for qualitative reasons.
Conclusions relating
to going concern
Our evaluation of the Directors’
assessment of the Group’s and the
Parent Company’s ability to continue
to adopt the going concern basis of
accounting included:
– evaluating management’s base case
and downside scenarios, challenging
and corroborating key assumptions;
– testing the accuracy of cash flow
models used to assess available
liquidity during the going
concern period;
– ensuring consistency with the key
assumptions used in other areas
of our audit such as the assessment
of goodwill impairment; and
– reading management’s disclosures
in the financial statements and
relevant “other information” in
the Annual Report and checking
consistency with the financial
statements and our knowledge
based on our audit.
Based on the work we have
performed, we have not identified
any material uncertainties relating to
events or conditions that, individually
or collectively, may cast significant
doubt on the Group’s and the Parent
Company’s ability to continue as a
going concern for a period of at least
twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements,
we have concluded that the Directors’
use of the going concern basis of
accounting in the preparation of the
financial statements is appropriate.
However, because not all future events
or conditions can be predicted, this
conclusion is not a guarantee as to
the Group’s and the Parent Company’s
ability to continue as a going concern.
In relation to the Directors’ reporting
on how they have applied the UK
Corporate Governance Code, we
have nothing material to add or draw
attention to in relation to the Directors’
statement in the financial statements
about whether the Directors considered
it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the
responsibilities of the Directors
with respect to going concern are
described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of
the information in the Annual Report
other than the financial statements
and our auditors’ report thereon.
The Directors are responsible for the
other information. Our opinion on the
financial statements does not cover
the other information and, accordingly,
we do not express an audit opinion or,
except to the extent otherwise explicitly
stated in this report, any form of
assurance thereon.
In connection with our audit of the
financial statements, our responsibility
is to read the other information and, in
doing so, consider whether the other
information is materially inconsistent
with the financial statements or our
knowledge obtained in the audit, or
otherwise appears to be materially
misstated. If we identify an apparent
material inconsistency or material
misstatement, we are required to
perform procedures to conclude
whether there is a material
misstatement of the financial
statements or a material misstatement
of the other information. If, based on
the work we have performed, we
conclude that there is a material
misstatement of this other information,
we are required to report that fact.
We have nothing to report based
on these responsibilities.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect
of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Parent Company
Overall materiality £5,400,000 (2022: £5,000,000). £3,312,000 (2022: £3,161,000).
How we determined it 5% of profit before taxation, adjusted for
exceptional items and acquisition related
costs (‘underlying profit before taxation’)
1% of total assets
Rationale for
benchmark applied
In our view, underlying profit before taxation
represents the primary measure used by the
shareholders in assessing the performance
of the Group.
The Parent Company does not have trading
activities. Therefore, total assets has been
used as it represents a generally accepted
auditing benchmark used to determine
materiality in a holding company.
Independent auditors’ report to the
members of Clarkson PLC continued
154 Clarkson PLC
2023 Annual Report
With respect to the Strategic
Report and Directors’ Report, we also
considered whether the disclosures
required by the UK Companies Act
2006 have been included.
Based on our work undertaken in the
course of the audit, the Companies
Act 2006 requires us also to report
certain opinions and matters as
described below.
Strategic Report and
Directors’ Report
In our opinion, based on the work
undertaken in the course of the audit,
the information given in the Strategic
Report and Directors’ Report for
the year ended 31 December 2023
is consistent with the financial
statements and has been prepared
in accordance with applicable
legal requirements.
In light of the knowledge and
understanding of the Group and Parent
Company and their environment
obtained in the course of the audit,
we did not identify any material
misstatements in the Strategic Report
and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the
Directors’ Remuneration Report
to be audited has been properly
prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review
the Directors’ statements in relation
to going concern, longer-term
viability and that part of the corporate
governance statement relating to
the Parent Company’s compliance
with the provisions of the UK Corporate
Governance Code specified for our
review. Our additional responsibilities
with respect to the corporate
governance statement as other
information are described in the
Reporting on other information
section of this report.
Based on the work undertaken as part
of our audit, we have concluded that
each of the following elements of the
corporate governance statement is
materially consistent with the financial
statements and our knowledge obtained
during the audit, and we have nothing
material to add or draw attention to
in relation to:
– The Directors’ confirmation that
they have carried out a robust
assessment of the emerging
and principal risks;
– The disclosures in the Annual
Report that describe those principal
risks, what procedures are in place
to identify emerging risks and an
explanation of how these are being
managed or mitigated;
– The Directors’ statement in the
financial statements about whether
they considered it appropriate to
adopt the going concern basis of
accounting in preparing them, and
their identification of any material
uncertainties to the Group’s and
Parent Company’s ability to continue
to do so over a period of at least
twelve months from the date of
approval of the financial statements;
– The Directors’ explanation as to
their assessment of the Group’s and
Parent Company’s prospects, the
period this assessment covers and
why the period is appropriate; and
– The Directors’ statement as to
whether they have a reasonable
expectation that the Parent Company
will be able to continue in operation
and meet its liabilities as they fall due
over the period of its assessment,
including any related disclosures
drawing attention to any necessary
qualifications or assumptions.
Our review of the Directors’ statement
regarding the longer-term viability of
the Group and Parent Company was
substantially less in scope than an audit
and only consisted of making inquiries
and considering the Directors’ process
supporting their statement; checking
that the statement is in alignment
with the relevant provisions of the
UK Corporate Governance Code; and
considering whether the statement is
consistent with the financial statements
and our knowledge and understanding
of the Group and Parent Company
and their environment obtained
in the course of the audit.
In addition, based on the work
undertaken as part of our audit,
we have concluded that each of the
following elements of the corporate
governance statement is materially
consistent with the financial
statements and our knowledge
obtained during the audit:
– The Directors’ statement that
they consider the Annual Report,
taken as a whole, is fair, balanced
and understandable, and provides
the information necessary for the
members to assess the Group’s
and Parent Company’s position,
performance, business model
and strategy;
– The section of the Annual Report
that describes the review of
effectiveness of risk management
and internal control systems; and
– The section of the Annual Report
describing the work of the Audit
and Risk Committee.
We have nothing to report in respect
of our responsibility to report when
the Directors’ statement relating to
the Parent Company’s compliance with
the Code does not properly disclose a
departure from a relevant provision of
the Code specified under the Listing
Rules for review by the auditors.
Responsibilities for the financial
statements and the audit
Responsibilities of the Directors
for the financial statements
As explained more fully in the
Directors’ Responsibilities Statement,
the Directors are responsible for the
preparation of the financial statements
in accordance with the applicable
framework and for being satisfied
that they give a true and fair view.
The Directors are also responsible for
such internal control as they determine
is necessary to enable the preparation
of financial statements that are free
from material misstatement, whether
due to fraud or error.
In preparing the financial statements,
the Directors are responsible for
assessing the Group’s and the Parent
Company’s ability to continue as a
going concern, disclosing, as applicable,
matters related to going concern
and using the going concern basis
of accounting unless the Directors
either intend to liquidate the Group
or the Parent Company or to cease
operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the
audit of the financial statements
Our objectives are to obtain
reasonable assurance about whether
the financial statements as a whole
are free from material misstatement,
whether due to fraud or error, and to
issue an auditors’ report that includes
our opinion. Reasonable assurance is
a high level of assurance, but is not a
guarantee that an audit conducted in
accordance with ISAs (UK) will always
detect a material misstatement when
it exists. Misstatements can arise from
fraud or error and are considered
material if, individually or in the
aggregate, they could reasonably be
expected to influence the economic
decisions of users taken on the basis
of these financial statements.
155Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. We design procedures
in line with our responsibilities, outlined
above, to detect material misstatements
in respect of irregularities, including
fraud. The extent to which our
procedures are capable of detecting
irregularities, including fraud,
is detailed below.
Based on our understanding of the
Group and industry, we identified that
the principal risks of non-compliance
with laws and regulations related to
international trade regulations and
regulatory licence requirements for
the Group’s Securities business, and
we considered the extent to which
non-compliance might have a material
effect on the financial statements.
We also considered those laws and
regulations that have a direct impact
on the financial statements such
as the Companies Act 2006. We
evaluated management’s incentives
and opportunities for fraudulent
manipulation of the financial statements
(including the risk of override of
controls), and determined that the
principal risks were related to the
artificial inflation of reported results
through the posting of inappropriate
journal entries and management bias
in accounting estimates. The Group
engagement team shared this risk
assessment with the component
auditors so that they could include
appropriate audit procedures in
response to such risks in their work.
Audit procedures performed by the
Group engagement team and/or
component auditors included:
– Inspecting correspondence with
regulators and tax authorities.
– Reviewing minutes of meetings
of those charged with governance
including the Board, Audit and
Risk Committee and Remuneration
Committee.
– Discussions with management
including consideration of known
or suspected instances of
non-compliance with laws and
regulation and fraud.
– Evaluating management’s controls
designed to prevent and detect
irregularities.
– Identifying and testing journals,
in particular journal entries posted
with unusual account combinations,
postings by unusual users or with
unusual descriptions.
– Challenging assumptions and
judgements made by management
in their critical accounting estimates
including the key audit matters
described above.
There are inherent limitations in the
audit procedures described above.
We are less likely to become aware
of instances of non-compliance
with laws and regulations that are
not closely related to events and
transactions reflected in the financial
statements. Also, the risk of not
detecting a material misstatement
due to fraud is higher than the risk
of not detecting one resulting from
error, as fraud may involve deliberate
concealment by, for example, forgery
or intentional misrepresentations,
or through collusion.
Our audit testing might include
testing complete populations of
certain transactions and balances,
possibly using data auditing
techniques. However, it typically
involves selecting a limited number
of items for testing, rather than testing
complete populations. We will often
seek to target particular items for
testing based on their size or risk
characteristics. In other cases, we
will use audit sampling to enable
us to draw a conclusion about the
population from which the sample
is selected.
A further description of our
responsibilities for the audit of
the financial statements is located
on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
auditors’ report.
Use of this report
This report, including the opinions,
has been prepared for and only for the
Parent Company’s members as a body
in accordance with Chapter 3 of Part
16 of the Companies Act 2006 and for
no other purpose. We do not, in giving
these opinions, accept or assume
responsibility for any other purpose
or to any other person to whom this
report is shown or into whose hands
it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006
exception reporting
Under the Companies Act 2006
we are required to report to you if,
in our opinion:
– we have not obtained all the
information and explanations
we require for our audit; or
– adequate accounting records
have not been kept by the Parent
Company, or returns adequate for
our audit have not been received
from branches not visited by us; or
– certain disclosures of Directors’
remuneration specified by law
are not made; or
– the Parent Company financial
statements and the part of the
Directors’ Remuneration Report to
be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report
arising from this responsibility.
Appointment
Following the recommendation of the
Audit and Risk Committee, we were
appointed by the Directors on 9 July
2009 to audit the financial statements
for the year ended 31 December 2009
and subsequent financial periods.
The period of total uninterrupted
engagement is 15 years, covering
the years ended 31 December 2009
to 31 December 2023.
Other matter
As required by the Financial Conduct
Authority Disclosure Guidance and
Transparency Rule 4.1.14R, these
financial statements form part of the
ESEF-prepared annual financial report
filed on the National Storage
Mechanism of the Financial Conduct
Authority in accordance with the ESEF
Regulatory Technical Standard (‘ESEF
RTS’). This auditors’ report provides
no assurance over whether the annual
financial report has been prepared
using the single electronic format
specified in the ESEF RTS.
Christopher Burns
(Senior Statutory Auditor)
for and on behalf of
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory
Auditors
London
1 March 2024
Independent auditors’ report to the
members of Clarkson PLC continued
156 Clarkson PLC
2023 Annual Report
2023 | 2022 | |||||||
| Before | After | |||||||
| exceptional | exceptional | |||||||
| items and | Acquisition- | items and | Before | Acquisition- | After | |||
| acquisition- | Exceptional | related | acquisition- | acquisition- | related | acquisition- | ||
| related | items | costs | related | related | costs | related | ||
| costs | (note 5) | (note 6) | costs | costs | (note 6) | costs | ||
| Note(s) | £m | £m | £m | £m | £m | £m | £m | |
Revenue | 3, 4 | |||||||
Cost of sales | 3 | ( | ( | ( | ( | |||
Trading profit | ||||||||
Administrative expenses | ( | ( | ( | ( | ( | ( | ||
Operating profit/(loss) | 3, 4 | ( | ( | |||||
Finance income | 3 | |||||||
Finance costs | 3 | ( | ( | ( | ( | |||
Other finance income – pensions | 3 | |||||||
Profit/(loss) before taxation | ( | ( | ||||||
Taxation | 7 | ( | ( | ( | ( | |||
Profit/(loss) for the year | ( | ( | ||||||
| Attributable to: | ||||||||
| Equity holders of the Parent | ||||||||
Company | ( | ( | ||||||
Non-controlling interests | ||||||||
Profit/(loss) for the year | ( | ( | ||||||
| Earnings per share | ||||||||
Basic | 8 | |||||||
Diluted | 8 |
Included in the consolidated income statement are net impairment losses on financial assets amounting to £3. 9 m (2022: £5 . 8 m).
Consolidated statement of comprehensive income
for the year ended 31 December
Note(s)
| 2023 | 2022 | ||
| £m | £m | ||
Profit for the year | |||
| Other comprehensive (loss)/income: | |||
| Items that will not be reclassified to profit or loss: | |||
Actuarial loss on employee benefit schemes – net of tax | 23 | ( | ( |
| Items that may be reclassified subsequently to profit or loss: | |||
Foreign exchange differences on retranslation of foreign operations | ( | ||
Foreign currency hedges recycled to profit or loss – net of tax | 25 | ||
Foreign currency hedge revaluations – net of tax | 25 | ( | |
Other comprehensive (loss)/income | ( | ||
Total comprehensive income for the year | |||
| Attributable to: | |||
Equity holders of the Parent Company | |||
Non-controlling interests | |||
Total comprehensive income for the year |
Consolidated income statement
for the year ended 31 December
Overview
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Financial
statements
Strategic
Report
Other
information
157Clarkson PLC
2023 Annual Report
Note(s)
| 2023 | 2022 | ||
| £m | £m | ||
| Non-current assets | |||
Property, plant and equipment | 10 | ||
Investment properties | 11 | ||
Right-of-use assets | 12 | ||
Intangible assets | 13 | ||
Trade and other receivables | 15 | ||
Investments | 16 | ||
Employee benefits | 23 | ||
Deferred tax assets | 7 | ||
| Current assets | |||
Inventories | 17 | ||
Trade and other receivables | 15 | ||
Income tax receivable | |||
Investments | 16 | ||
Cash and cash equivalents | 18 | ||
| Current liabilities | |||
Trade and other payables | 19 | ( | ( |
Lease liabilities | 20 | ( | ( |
Income tax payable | ( | ( | |
Provisions | 21 | ( | ( |
( | ( | ||
Net current assets | |||
| Non-current liabilities | |||
Trade and other payables | 19 | ( | ( |
Lease liabilities | 20 | ( | ( |
Provisions | 21 | ( | ( |
Employee benefits | 23 | ( | ( |
Deferred tax liabilities | 7 | ( | ( |
( | ( | ||
Net assets | |||
| Capital and reserves | |||
Share capital | 24 | ||
Other reserves | 25 | ||
Retained earnings | |||
Equity attributable to shareholders of the Parent Company | |||
Non-controlling interests | |||
Total equity |
Registered number: 1190238
Consolidated balance sheet
as at 31 December
158 Clarkson PLC
2023 Annual Report
| Attributable to equity holders of the Parent Company | Non- | ||||||
| Share | Other | Retained | controlling | ||||
| capital | reserves | earnings | Total | interests | Total equity | ||
| Note(s) | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2023 | |||||||
Profit for the year | |||||||
Other comprehensive loss | ( | ( | ( | ( | ( | ||
Total comprehensive (loss)/income for the year | ( | ||||||
| Transactions with owners: | |||||||
Share issues | 24,25 | ||||||
Employee share schemes | 25 | ( | ( | ( | ( | ||
Tax on other employee benefits | 7 | ( | ( | ( | |||
Tax on other items in equity | 7 | ||||||
Dividend paid | 9 | ( | ( | ( | ( | ||
Other movements | ( | ||||||
Total transactions with owners | ( | ( | ( | ( | ( | ||
Balance at 31 December 2023 |
| Attributable to equity holders of the Parent Company | Non- | ||||||
| Share | Other | Retained | controlling | ||||
| capital | reserves | earnings | Total | interests | Total equit y | ||
| Note(s) | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2022 | |||||||
Profit for the year | |||||||
Other comprehensive income/(loss) | ( | ||||||
Total comprehensive income for the year | |||||||
| Transactions with owners: | |||||||
Share issues | 24,25 | ||||||
Employee share schemes | 25 | ( | ( | ( | |||
Tax on other employee benefits | 7 | ( | ( | ( | |||
Tax on other items in equity | 7 | ( | ( | ( | |||
Dividend paid | 9 | ( | ( | ( | ( | ||
Other movements | ( | ( | ( | ( | |||
Total transactions with owners | ( | ( | ( | ( | |||
Balance at 31 December 2022 |
Overview
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Financial
statements
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Report
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information
159Clarkson PLC
2023 Annual Report
Consolidated statement of changes in equity
for the year ended 31 December
Note(s)
| 2023 | 2022 | ||
| £m | £m | ||
| Cash flows from operating activities | |||
Profit before taxation | |||
| Adjustments for: | |||
Foreign exchange differences | 3 | ( | |
Depreciation | 3, 10, 11, 12 | ||
Share-based payment expense | 22 | ||
(Gain)/loss on sale of property, plant and equipment | ( | ||
Amortisation of intangibles | 3, 13 | ||
| Difference between pension contributions paid and amount recognised | |||
in the income statement | |||
Finance income | 3 | ( | ( |
Finance costs | 3 | ||
Other finance income – pensions | 3 | ( | ( |
Increase in inventories | 17 | ( | ( |
Decrease/(increase) in trade and other receivables | ( | ||
Increase in bonus accrual | |||
(Decrease)/increase in trade and other payables | ( | ||
Increase in provisions | |||
Cash generated from operations | |||
Income tax paid | ( | ( | |
Net cash flow from operating activities | |||
| Cash flows from investing activities | |||
Interest received | |||
Purchase of property, plant and equipment | 10 | ( | ( |
Purchase of intangible assets | 13 | ( | ( |
Purchase of investments | ( | ( | |
Proceeds from sale of investments | |||
Proceeds from sale of property, plant and equipment | |||
Transfer from current investments (cash on deposit and government bonds) | 16 | ||
Transfer to current investments (cash on deposit and government bonds) | 16 | ( | ( |
Acquisition of subsidiaries, net of cash acquired | 13 | ( | ( |
Dividends received from investments | 3 | ||
Net cash flow from investing activities | ( | ( | |
| Cash flows from financing activities | |||
Interest paid and other charges | ( | ( | |
Dividend paid | 9 | ( | ( |
Dividend paid to non-controlling interests | ( | ( | |
Repayment of borrowings | ( | ( | |
Principal elements of lease payments | ( | ( | |
Proceeds from shares issued | |||
Contributions to non-controlling interests | ( | ||
ESOP shares acquired | ( | ( | |
Net cash flow from financing activities | ( | ( | |
Net increase in cash and cash equivalents | |||
Cash and cash equivalents at 1 January | |||
Net foreign exchange differences | ( | ||
Cash and cash equivalents at 31 December | 18 |
Consolidated cash flow statement
for the year ended 31 December
160 Clarkson PLC
2023 Annual Report
1 Corporate information
The Group and Parent Company financial statements
of Clarkson PLC for the year ended 31 December 2023
were authorised for issue in accordance with a resolution
of the Directors on 1 March 2024. Clarkson PLC is a Public
incorporated in the UK , registered in England and Wales
and domiciled in the UK .
The term ‘Parent Company’ refers to Clarkson PLC
‘Group’ refers to the Company, its consolidated subsidiaries
and the relevant assets and liabilities of the share
purchase trusts.
Copies of the Annual Report will be circulated to all
shareholders and will also be available from the registered
office of the Company at Commodity Quay, St Katharine
2 Statement of accounting policies
Overview
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161Clarkson PLC
2023 Annual Report
Notes to the consolidated financial statements
2 Statement of accounting policies continued
Notes to the consolidated financial statements continued
162 Clarkson PLC
2023 Annual Report
2 Statement of accounting policies continued
Freehold and long leasehold properties | 10 to 60 years |
| Over the period | |
| Leasehold improvements | of the lease |
Office furniture and equipment | 2 to 10 years |
Motor vehicles | 4 to 5 years |
Overview
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Governance
Financial
statements
Strategic
Report
Other
information
163Clarkson PLC
2023 Annual Report
2 Statement of accounting policies continued
Notes to the consolidated financial statements continued
164 Clarkson PLC
2023 Annual Report
2 Statement of accounting policies continued
Overview
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165Clarkson PLC
2023 Annual Report
2 Statement of accounting policies continued
2.13 Derivative financial instruments and
hedge accounting continued
Notes to the consolidated financial statements continued
166 Clarkson PLC
2023 Annual Report
2 Statement of accounting policies continued
2.17 Share-based payment transactions continued
Overview
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167Clarkson PLC
2023 Annual Report
2 Statement of accounting policies continued
2.19 Revenue recognition continued
Notes to the consolidated financial statements continued
168 Clarkson PLC
2023 Annual Report
2 Statement of accounting policies continued
2.22 Taxation continued
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169Clarkson PLC
2023 Annual Report
| 2023 | 2022 | |
| £m | £m | |
| Revenue | ||
Revenue from contracts with customers | 639.0 | 603.4 |
Revenue from other sources: rental income | 0.4 | 0.4 |
639.4 | 603.8 |
| 2023 | 2022 | |
| £m | £m | |
| Cost of sales | ||
Agency services | 9.1 | 5.9 |
Inventories | 19.6 | 14.2 |
Other | 1.7 | 1.7 |
30.4 | 21.8 |
| 2023 | 2022 | |
| £m | £m | |
| Finance income | ||
Bank interest income | 9.6 | 1.2 |
Dividend income | 0.1 | 0.2 |
Other finance income | 0.8 | 0.5 |
10.5 | 1.9 |
| 2023 | 2022 | |
| £m | £m | |
| Finance costs | ||
Interest expenses on lease liabilities | 1.7 | 1.9 |
Other finance costs | 0.5 | 0.3 |
2.2 | 2.2 |
| 2023 | 2022 | |
| £m | £m | |
| Other finance income – pensions | ||
Net benefit income | 0.7 | 0.4 |
| 2023 | 2022 | |
| £m | £m | |
Depreciation | 14.7 | 13.7 |
Amortisation of intangible assets | 4.8 | 4.1 |
Net foreign exchange losses/(gains) | 6.8 | (0.5) |
Research and development | 16.2 | 21.2 |
Short-term lease expense | 0.3 | 0.3 |
Notes to the consolidated financial statements continued
170 Clarkson PLC
2023 Annual Report
3 Revenue and expenses continued
| 2023 | 2022 | |
| £000 | £000 | |
| Auditors’ remuneration | ||
Fees payable to the Company’s Auditors for the audit of the Company’s and Group financial statements | 525 | 350 |
| Fees payable to the Company’s Auditors and their associates for other services: | ||
The auditing of financial statements of subsidiaries of the Company | 443 | 384 |
Audit-related assurance services | 94 | 89 |
1,062 | 823 |
| 2023 | 2022 | |
| £m | £m | |
| Employee compensation and benefits expense | ||
Wages and salaries | 370.2 | 350.1 |
Social security costs | 34.2 | 28.8 |
Share-based payment expense | 1.9 | 1.8 |
Pension costs – defined contribution plans | 10.0 | 9.3 |
416.3 | 390.0 |
2023 | 2022 | |
Broking | 1,337 | 1,256 |
Financial | 115 | 106 |
Support | 361 | 298 |
Research | 133 | 123 |
1,946 | 1,783 |
4 Segmental information
The Group considers the executive members of the Company’s Board to be the chief operating decision maker. The Board
receives segmental operating and financial information on a regular basis. The segments are determined by the class of
business the Company provides and are Broking, Financial, Support and Research. This is consistent with the way the Group
manages itself and with the format of the Group’s internal financial reporting.
Clarksons’ Broking division represents services provided to shipowners and charterers in the transportation by sea of a wide
range of cargoes. It also represents services provided to buyers and sellers/yards relating to sale and purchase transactions.
Also included is a futures broking operation which arranges principal-to-principal cash-settled contracts for differences
based upon standardised freight contracts.
The Financial division represents full-service investment banking, specialising in the maritime, oil services and natural
resources sectors. Clarksons also provides structured asset finance services and structured projects in the shipping,
offshore and real estate sectors.
Support includes port and agency services representing ship agency services provided throughout the UK and Egypt.
Research services encompass the provision of shipping-related information and publications.
All areas of the business work closely together to provide the best possible service to our clients. Internal recharges
are included within the appropriate segments. Segment revenue represents revenue from external customers.
The Group is not reliant on any major customer that contributes more than 10% of Group revenue.
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171Clarkson PLC
2023 Annual Report
4 Segmental information continued
Business segments
Revenue | Results | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Broking | 516.8 | 495.5 | 121.2 | 117.6 |
Financial | 44.1 | 49.8 | 6.6 | 7. 8 |
Support | 56.6 | 39.0 | 6.4 | 5.0 |
Research | 21.9 | 19.5 | 8.4 | 7.0 |
Segment revenue/profit | 639.4 | 603.8 | 142.6 | 137.4 |
Head office costs | (42.4) | (36.6) | ||
Operating profit before exceptional items and acquisition-related costs | 100.2 | 100.8 | ||
Exceptional items | 2.2 | – | ||
Acquisition-related costs | (2.6) | (0.8) | ||
Operating profit | 99.8 | 100.0 | ||
Finance income | 10.5 | 1.9 | ||
Finance costs | (2.2) | (2.2) | ||
Other finance income – pensions | 0.7 | 0.4 | ||
Profit before taxation | 108.8 | 100.1 | ||
Taxation | (23.0) | (20.5) | ||
Profit for the year | 85.8 | 79.6 |
Business segments
Assets | Liabilities | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Broking | 665.0 | 642.7 | 286.6 | 287.0 |
Financial | 76.1 | 101.1 | 26.0 | 48.4 |
Support | 69.1 | 41.6 | 34.1 | 16.4 |
Research | 10.9 | 11.4 | 14.1 | 12.8 |
Segment assets/liabilities | 821.1 | 796.8 | 360.8 | 364.6 |
Unallocated assets/liabilities | 54.5 | 35.5 | 58.2 | 54.5 |
875.6 | 832.3 | 419.0 | 419.1 |
Unallocated assets predominantly relate to head office cash balances and cash on deposit, the pension scheme surplus and
tax assets. Unallocated liabilities include the pension scheme deficit, tax liabilities and head office accruals.
Business segments
Non-current asset additions | Depreciation | Amortisation | ||||||
| Property, | Property, | |||||||
| plant and | Intangible | plant and | Intangible | |||||
| equipment | assets | equipment | assets | |||||
| 2023 | 2023 | 2022 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
Broking | 6.9 | 4.3 | 11.5 | 9.3 | 11.5 | 11.0 | 4.5 | 4.1 |
Financial | 0.5 | – | 0.8 | – | 1.1 | 1.2 | – | – |
Support | 8.9 | 2.8 | 1.2 | 0.2 | 1.7 | 1.2 | 0.3 | – |
Research | – | – | – | – | 0.4 | 0.2 | – | – |
16.3 | 7.1 | 13.5 | 9.5 | 14.7 | 13.6 | 4.8 | 4.1 | |
Notes to the consolidated financial statements continued
172 Clarkson PLC
2023 Annual Report
4 Segmental information continued
| Revenue | ||
| 2023 | 2022 | |
| £m | £m | |
Europe, Middle East and Africa* | 464.2 | 434.4 |
Americas | 33.6 | 32.2 |
Asia-Pacific | 141.6 | 137. 2 |
639.4 | 603.8 |
| Non-current assets** | ||
| 2023 | 2022 | |
| £m | £m | |
Europe, Middle East and Africa* | 236.2 | 237.7 |
Americas | 4.9 | 5.4 |
Asia-Pacific | 12.9 | 15.4 |
254.0 | 258.5 |
5 Exceptional items
In December 2023, the Group completed the sale of an industrial unit, which resulted in a gain of £3.5m, after transaction
fees and costs. The Group donated £1.3m of the proceeds to The Clarkson Foundation. The net gain of £2.2m is shown
as an exceptional item.
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2023 Annual Report
| 2023 | 2022 | |
| £m | £m | |
| Current tax | ||
Tax on profits for the year | 27. 3 | 26.9 |
Adjustments in respect of prior years | (0.8) | (0.7) |
26.5 | 26.2 | |
| Deferred tax | ||
Origination and reversal of temporary differences | (3.1) | (4. 9) |
Impact of change in tax rates | (0.4) | (0.8) |
(3.5) | (5.7) | |
Total tax charge in the income statement | 23.0 | 20.5 |
| 2023 | 2022 | ||
| £m | £m | ||
| Current tax | |||
Employee benefits | – on pension benefits | – | (0.1) |
Employee benefits | – other employee benefits | (0.3) | (0.3) |
Other items in equity | – | 0.4 | |
(0.3) | – | ||
| Deferred tax | |||
Employee benefits | – on pension benefits | (0.5) | (1.6) |
Employee benefits | – other employee benefits | 0.5 | 1.1 |
Foreign currency contracts | 2.5 | (1.8) | |
Other temporary differences | (0.1) | – | |
2.4 | (2.3) | ||
Total tax charge/(credit) in the statement of changes in equity | 2.1 | (2.3) |
| 2023 | 2022 | |
| £m | £m | |
Profit before taxation | 108.8 | 100.1 |
Profit at UK average standard rate of corporation tax of 23.5% (2022: 19%) | 25.6 | 19.0 |
| Effects of: | ||
Expenses not deductible for tax purposes | 2.4 | 2.3 |
Non-taxable income | (1.2) | – |
(Lower)/higher tax rates on overseas earnings | (3.3) | 0.4 |
Tax losses recognised | (0.4) | (0.1) |
Adjustments relating to prior year | (1.2) | (1.3) |
Adjustments relating to changes in tax rates | (0.4) | (0.8) |
Other adjustments | 1.5 | 1.0 |
Total tax charge in the income statement | 23.0 | 20.5 |
Notes to the consolidated financial statements continued
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2023 Annual Report
7 Taxation continued
| 2023 | 2022 | ||
| £m | £m | ||
Employee benefits | – on pension benefits | 0.1 | (0.1) |
Employee benefits | – on employee benefits | (3.0) | (6.7) |
In relation to earnings of overseas subsidiaries | 0.3 | 0.5 | |
Other temporary differences | (0.9) | 0.6 | |
Deferred tax credit in the income statement | (3.5) | (5.7) |
| 2023 | 2022 | ||
| £m | £m | ||
| Deferred tax assets | |||
Employee benefits | – on pension benefits | – | 0.1 |
– other employee benefits | 17.7 | 15.8 | |
Foreign currency contracts | – | 1.7 | |
Other temporary differences | 3.1 | 0.9 | |
Deferred tax assets before offset | 20.8 | 18.5 | |
Offset against deferred tax liabilities | (4.0) | (3.9) | |
Deferred tax assets in the balance sheet | 16.8 | 14.6 | |
| Deferred tax liabilities | |||
Employee benefits | – on pension benefits | (3.5) | (3.9) |
In relation to earnings of overseas subsidiaries | (3.1) | (2.8) | |
Foreign currency contracts | (0.8) | – | |
Intangible assets | (2.4) | (2.4) | |
Other temporary differences | (3.6) | (1.9) | |
Deferred tax liabilities before offset | (13.4) | (11.0) | |
Offset against deferred tax assets | 4.0 | 3.9 | |
Deferred tax liabilities in the balance sheet | (9.4) | (7.1) | |
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2023 Annual Report
8 Earnings per share
2023 | 2022 | |||
| Underlying | Reported | Underlying | Reported | |
| £m | £m | £m | £m | |
Profit for the year attributable to equity holders of the Parent Company | 83.8 | 83.8 | 76.3 | 75.6 |
2023 | 2022 | |||
| Underlying | Reported | Underlying | Reported | |
| Million | Million | Million | Million | |
| Weighted average number of ordinary shares | ||||
(excluding share purchase trusts’ shares) – basic | 30.5 | 30.5 | 30.5 | 30.5 |
Dilutive effect of share options | 0.2 | 0.2 | 0.2 | 0.2 |
| Weighted average number of ordinary shares | ||||
(excluding share purchase trusts’ shares) – diluted | 30.7 | 30.7 | 30.7 | 30.7 |
2023 | 2022 | |||
| Underlying | Reported | Underlying | Reported | |
| Pence | Pence | Pence | Pence | |
Basic earnings per share | 275.0 | 275.2 | 250.3 | 247.9 |
Diluted earnings per share | 273.5 | 273.6 | 248.5 | 246.1 |
Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the
Parent Company by the weighted average number of ordinary shares in issue during the year.
Diluted earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of
the Parent Company by the weighted average number of ordinary shares in issue during the year, plus the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary
shares. The calculation of diluted earnings per share does not assume conversion, exercise, or other issue of potential
ordinary shares that would have an anti-dilutive effect on earnings per share.
The share awards relating to Directors, where the performance conditions have not yet been met at the balance sheet date,
are not included in the above numbers. The weighted average number of these shares was 50,196 (2022: nil).
There were 22,901 share options in relation to the employee ShareSave scheme that are not included because they are
anti-dilutive at the year end (2022: 34,089). These options could potentially dilute basic earnings per share in the future.
9 Dividends
| 2023 | 2022 | |
| £m | £m | |
| Declared and paid during the year: | ||
Final dividend for 2022 of | 19.3 | 17.2 |
Interim dividend for 2023 of | 9.0 | 8.7 |
Dividend paid | 28.3 | 25.9 |
| Proposed for approval at the AGM (not recognised as a liability at 31 December): | ||
Final dividend for 2023 proposed of 72p per share (2022: 64p per share) | 22.1 | 19.6 |
Notes to the consolidated financial statements continued
176 Clarkson PLC
2023 Annual Report
10 Property, plant and equipment
31 December 2023
| Freehold | |||||
| and long | Office | ||||
| leasehold | Leasehold | furniture and | Motor | ||
| properties | improvements | equipment | vehicles | Total | |
| £m | £m | £m | £m | £m | |
| Original cost | |||||
At 1 January 2023 | 10.0 | 20.6 | 27.3 | 1.1 | 59.0 |
Additions | 1.8 | 1.6 | 4.5 | 0.1 | 8.0 |
Arising on acquisitions | – | 0.2 | 0.1 | 0.1 | 0.4 |
Disposals | (0.2) | (0.3) | – | (0.3) | (0.8) |
Foreign exchange differences | (0.3) | (0.4) | (0.5) | (0.1) | (1.3) |
At 31 December 2023 | 11.3 | 21.7 | 31.4 | 0.9 | 65.3 |
| Accumulated depreciation | |||||
At 1 January 2023 | 2.1 | 11.0 | 19.6 | 0.8 | 33.5 |
Charged during the year | 0.1 | 1.5 | 3.1 | 0.1 | 4.8 |
Disposals | (0.1) | (0.2) | – | (0.2) | (0.5) |
Foreign exchange differences | (0.2) | (0.2) | (0.4) | (0.2) | (1.0) |
At 31 December 2023 | 1.9 | 12.1 | 22.3 | 0.5 | 36.8 |
Net book value at 31 December 2023 | 9.4 | 9.6 | 9.1 | 0.4 | 28.5 |
31 December 2022
| Freehold | |||||
| and long | Office | ||||
| leasehold | Leasehold | furniture and | Motor | ||
| properties | improvements | equipment | vehicles | Total | |
| £m | £m | £m | £m | £m | |
| Original cost | |||||
At 1 January 2022 | 9.4 | 18.7 | 23.4 | 1.3 | 52.8 |
Additions | 1.2 | 2.1 | 4.3 | – | 7.6 |
Arising on acquisitions | – | – | 0.1 | – | 0.1 |
Disposals | (0.9) | (0.6) | (1.1) | (0.2) | (2.8) |
Foreign exchange differences | 0.3 | 0.4 | 0.6 | – | 1.3 |
At 31 December 2022 | 10.0 | 20.6 | 27. 3 | 1.1 | 59.0 |
| Accumulated depreciation | |||||
At 1 January 2022 | 1.9 | 9.8 | 17.9 | 0.7 | 30.3 |
Charged during the year | 0.2 | 1.4 | 2.3 | 0.2 | 4.1 |
Disposals | (0.1) | (0.5) | (1.1) | (0.1) | (1.8) |
Foreign exchange differences | 0.1 | 0.3 | 0.5 | – | 0.9 |
At 31 December 2022 | 2.1 | 11.0 | 19.6 | 0.8 | 33.5 |
Net book value at 31 December 2022 | 7.9 | 9.6 | 7.7 | 0.3 | 25.5 |
At 31 December 2023 there was £15.2m included in the above figures relating to fully depreciated property, plant
and equipment that is still in use (2022: £13.6m).
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2023 Annual Report
11 Investment properties
| 2023 | 2022 | |
| £m | £m | |
| Cost | ||
At 1 January and 31 December | 2.1 | 2.1 |
| Accumulated depreciation | ||
At 1 January | 1.1 | 0.9 |
Charged during the year* | – | 0.1 |
Foreign exchange differences | – | 0.1 |
At 31 December | 1.1 | 1.1 |
Net book value at 31 December | 1.0 | 1.0 |
* The depreciation charged during 2023 was less than £0.1m.
The fair value of the investment properties at 31 December 2023 was £2.2m (2022: £2.3m). This was based on valuations
from external independent valuers who have the appropriate professional qualifications and recent experience of valuing
properties in the location and of the type being valued.
| Leasehold | Leasehold | |
| properties | properties | |
| 2023 | 2022 | |
| £m | £m | |
| Cost | ||
As at 1 January | 70.8 | 69.5 |
Additions | 4.4 | 5.9 |
Arising on acquisitions | 3.5 | – |
Disposals | (1.3) | (6.6) |
Foreign exchange differences | (2.7) | 2.0 |
At 31 December | 74.7 | 70.8 |
| Accumulated depreciation | ||
As at 1 January | 31.5 | 24.4 |
Charged during the year | 9.9 | 9.5 |
Disposals | (1.3) | (3.3) |
Foreign exchange differences | (1.3) | 0.9 |
At 31 December | 38.8 | 31.5 |
Net book value at 31 December | 35.9 | 39.3 |
Notes to the consolidated financial statements continued
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2023 Annual Report
| Other | ||||
| Development | intangible | |||
| Goodwill | costs | assets | Total | |
| £m | £m | £m | £m | |
| Cost | ||||
At 1 January 2023 | 291.9 | 21.3 | 33.4 | 346.6 |
Additions | – | 2.8 | – | 2.8 |
Arising on acquisitions | 1.2 | – | 3.1 | 4.3 |
Other (reclassification) | – | 1.2 | (1.2) | – |
Foreign exchange differences | (16.4) | – | (1.4) | (17. 8) |
At 31 December 2023 | 276.7 | 25.3 | 33.9 | 335.9 |
| Accumulated amortisation and impairment | ||||
At 1 January 2023 | 120.3 | 6.2 | 31.2 | 157.7 |
Charged during the year | – | 4.2 | 0.6 | 4.8 |
Foreign exchange differences | (8.1) | – | (1.4) | (9.5) |
At 31 December 2023 | 112.2 | 10.4 | 30.4 | 153.0 |
Net book value at 31 December 2023 | 164.5 | 14.9 | 3.5 | 182.9 |
| Other | ||||
| Development | intangible | |||
| Goodwill | costs | assets | Total | |
| £m | £m | £m | £m | |
| Cost | ||||
At 1 January 2022 | 284.8 | 19.3 | 30.6 | 334.7 |
Additions | – | 2.0 | – | 2.0 |
Arising on acquisitions | 5.4 | – | 2.1 | 7. 5 |
Other (reclassification) | (0.2) | – | 0.2 | – |
Foreign exchange differences | 1.9 | – | 0.5 | 2.4 |
At 31 December 2022 | 291.9 | 21.3 | 33.4 | 346.6 |
| Accumulated amortisation and impairment | ||||
At 1 January 2022 | 118.9 | 2.2 | 30.4 | 151.5 |
Charged during the year | – | 4.0 | 0.1 | 4.1 |
Other (reclassification) | (0.1) | – | 0.1 | – |
Foreign exchange differences | 1.5 | – | 0.6 | 2.1 |
At 31 December 2022 | 120.3 | 6.2 | 31.2 | 157.7 |
Net book value at 31 December 2022 | 171.6 | 15.1 | 2.2 | 188.9 |
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13 Intangible assets continued
| Recap | |||||
| DHSS | MarDocs | Manager | Leme | Total | |
| £m | £m | £m | £m | £m | |
Intangible assets | 2.2 | 0.9 | – | – | 3.1 |
Property, plant and equipment | 0.4 | – | – | – | 0.4 |
Right-of-use assets | 3.5 | – | – | – | 3.5 |
Trade and other receivables | 5.5 | – | 0.1 | – | 5.6 |
Cash and cash equivalents | – | – | 0.1 | – | 0.1 |
Total assets | 11.6 | 0.9 | 0.2 | – | 12.7 |
Trade and other payables (current) | (3.5) | – | (0.2) | – | (3.7) |
Lease liability (current) | (0.5) | – | – | – | (0.5) |
Trade and other payables (non-current) | – | – | (0.5) | – | (0.5) |
Lease liability (non-current) | (3.0) | – | – | – | (3.0) |
Deferred tax liabilities | (0.6) | (0.2) | – | – | (0.8) |
Total liabilities | (7.6) | (0.2) | (0.7) | – | (8.5) |
Net identifiable assets acquired | 4.0 | 0.7 | (0.5) | – | 4.2 |
Goodwill | 0.1 | 0.5 | 0.5 | 0.1 | 1.2 |
Total consideration paid in cash | 4.1 | 1.2 | – | 0.1 | 5.4 |
Notes to the consolidated financial statements continued
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13 Intangible assets continued
| Recap | ||||
| DHSS | MarDocs | Manager | Leme | |
| £m | £m | £m | £m | |
Revenue contributed since acquisition | 10.8 | 0.3 | 0.5 | – |
Net profit after tax since acquisition | 0.8 | 0.1 | 0.4 | – |
Consolidated pro-forma revenue | 639.9 | 639.4 | 639.4 | 639.8 |
Consolidated pro-forma reported profit for the year | 85.8 | 85.8 | 85.8 | 85.8 |
| 2023 | |
| £m | |
| Outflow of cash to acquire subsidiaries, net of cash acquired | |
DHSS cash consideration | 4.1 |
MarDocs cash consideration | 1.2 |
Leme cash consideration | 0.1 |
| 5.4 | |
Less: Cash acquired | (0.1) |
Net outflow of cash – investing activities | 5.3 |
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14 Impairment testing of goodwill
Goodwill is allocated to the Group’s cash-generating units (‘CGUs’) identified according to operating division.
The carrying amount of goodwill acquired through business combinations is as follows:
| 2023 | 2022 | |
| £m | £m | |
Dry cargo chartering | 16.2 | 16.1 |
Container chartering | 2.0 | 2.0 |
Tankers chartering | 10.8 | 10.6 |
Specialised products chartering | 13.1 | 13.1 |
Gas chartering | 2.8 | 2.8 |
Sale and purchase broking | 42.2 | 45.8 |
Offshore broking | 46.3 | 48.1 |
Securities | 13.0 | 14.1 |
Project finance | 11.6 | 12.6 |
Port and agency services | 3.2 | 3.1 |
Research services | 3.3 | 3.3 |
164.5 | 171.6 |
The movement in the aggregate carrying value is analysed in more detail in note 13.
Goodwill is allocated to CGUs which are tested for impairment at least annually. The goodwill arising in each CGU is similar
in nature and thus the testing for impairment uses the same approach.
The recoverable amounts of the CGUs are assessed using a value-in-use model. Value-in-use is calculated as the net present
value of the projected risk-adjusted cash flows of the CGU to which the goodwill is allocated.
The key assumptions used for value-in-use calculations are as follows:
− The pre-tax discount rate for the chartering and broking CGUs is 12.3% (2022: 12.7%); port and agency services is
12.4% (2022: 13.3%); research services is 12.1% (2022: 13.2%); and for securities and project finance is 12.5% (2022: 13.4%).
As all broking and chartering CGUs have operations that are global in nature and similar risk profiles, the same discount
rate has been used.
− These discount rates are based on the Group’s weighted average cost of capital (‘WACC’) and adjusted for CGU-specific
risk factors. The Group’s WACC is a function of the Group’s cost of equity, derived using a Capital Asset Pricing Model.
The cost of equity includes a number of variables to reflect the inherent risk of the business being evaluated.
− The cash flow projections are based on financial budgets and strategic plans approved by the Board, extrapolated over a
five-year period. These assume a level of revenue and profits which are based on both past performance and expectations
for future market development and take into account the cyclicality of the business in which the CGU operates. The effect
on cash flows of climate change was considered but assessed to have no material impact at this time. Cash flows beyond
the five-year period are extrapolated in perpetuity using a conservative growth rate of 1.7% (2022: 1.7%) across all CGUs.
The results of the Directors’ review of goodwill indicate remaining headroom for all CGUs.
As the offshore broking and securities CGUs were subject to impairment in previous years, sensitivity analysis has been
carried out using reasonably possible changes to key assumptions, none of which cause an impairment. An increase in
the discount rate of 0.5% would decrease value-in-use by £2.1m for offshore broking and £0.5m for securities. A decrease
in total pre-tax cash flows of 5% would decrease value-in-use by £3.0m for offshore broking and £1.0m for securities.
For the other CGUs, there are no reasonably possible changes in key assumptions that would result in an impairment.
In light of continuing, global macro-economic and geo-political uncertainty, the Board keeps the carrying value of goodwill
under constant review and continually monitors for any potential indicators of impairment.
Notes to the consolidated financial statements continued
182 Clarkson PLC
2023 Annual Report
| 2023 | 2022 | |
| £m | £m | |
| Non-current | ||
Other receivables | 1.7 | 2.6 |
Foreign currency contracts | 2.7 | – |
4.4 | 2.6 | |
| Current | ||
Trade receivables | 121.7 | 127.2 |
Other receivables | 11.4 | 10.3 |
Foreign currency contracts | 0.8 | 0.1 |
Prepayments | 9.5 | 9.0 |
Contract assets | 4.1 | 3.5 |
147. 5 | 150.1 |
2023 | 2022 | |||||
| Expected loss | Gross carrying | Loss | Expected loss | Gross carrying | Loss | |
| rate | amount | allowance | rate | amount | allowance | |
| % | £m | £m | % | £m | £m | |
0 – 3 months | 3.5 | 108.5 | 3.8 | 3.6 | 116.2 | 4.2 |
3 – 12 months | 25.3 | 22.7 | 5.7 | 24.4 | 20.1 | 4.9 |
Over 12 months | 100.0 | 12.4 | 12.4 | 100.0 | 10.5 | 10.5 |
143.6 | 21.9 | 146.8 | 19.6 |
| 2023 | 2022 | |
| £m | £m | |
At 1 January | 19.6 | 12.9 |
Release of loss allowance | (11.8) | (8.2) |
Receivables written off during the year as uncollectible | (0.5) | (0.3) |
Increase in loss allowance | 15.7 | 14.3 |
Foreign exchange differences | (1.1) | 0.9 |
At 31 December | 21.9 | 19.6 |
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15 Trade and other receivables continued
| 2023 | 2022 | |
| £m | £m | |
US dollar | 83.3 | 81.7 |
Sterling | 24.1 | 19.8 |
Norwegian krone | 5.5 | 22.9 |
Other currencies | 8.8 | 2.8 |
121.7 | 127.2 |
| 2023 | 2022 | |
| £m | £m | |
| Non-current | ||
Financial assets at fair value through profit or loss | 1.3 | 1.2 |
1.3 | 1.2 | |
| Current | ||
Cash on deposit | 37. 8 | 3.1 |
Government bonds | 2.1 | – |
Financial assets at fair value through profit or loss | 0.2 | 0.4 |
40.1 | 3.5 |
17 Inventories
| 2023 | 2022 | |
| £m | £m | |
Finished goods | 3.3 | 2.4 |
The cost of inventories recognised as an expense and included in cost of sales amounted to £19.6m (2022: £14.2m).
18 Cash and cash equivalents
| 2023 | 2022 | |
| £m | £m | |
Cash at bank and in hand | 281.2 | 320.1 |
Short-term deposits | 117.7 | 64.3 |
398.9 | 384.4 |
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for
varying periods between one day and three months, depending on the immediate cash requirements of the Group, and earn
interest at the respective short-term deposit rates. The fair value of cash and cash equivalents is £398.9m (2022: £384.4m).
Included in cash at bank and in hand is £1.6m (2022: £12.4m) of restricted funds relating to employee taxes, security trading
deposits pending settlement and other commitments.
Notes to the consolidated financial statements continued
184 Clarkson PLC
2023 Annual Report
| 2023 | 2022 | |
| £m | £m | |
| Current | ||
Trade payables | 34.4 | 50.0 |
Other payables | 19.6 | 10.5 |
Other tax and social security | 5.7 | 12.3 |
Deferred consideration | 0.4 | – |
Foreign currency contracts | – | 3.7 |
Bonus accruals | 237.7 | 225.8 |
Other accruals | 30.1 | 24.1 |
Contract liabilities | 11.5 | 9.5 |
339.4 | 335.9 | |
| Non-current | ||
Other payables | 3.2 | 2.5 |
Foreign currency contracts | – | 3.3 |
3.2 | 5.8 |
20 Lease liabilities
| 2023 | 2022 | |
| £m | £m | |
| Current | ||
Lease liabilities | 10.4 | 9.9 |
| Non-current | ||
Lease liabilities | 32.8 | 37.7 |
A maturity analysis of undiscounted lease liability payments is included within note 28.
Included within lease liabilities are £10.0m (2022: £11.8m) of leases where payments are linked to an index. The liabilities
in relation to these leases are only adjusted as and when the change in rental cash flows takes effect.
| 2023 | 2022 | |
| £m | £m | |
| Current | ||
At 1 January | 0.6 | 0.6 |
Arising during the year | 0.1 | 0.2 |
Foreign exchange differences | (0.1) | (0.2) |
At 31 December | 0.6 | 0.6 |
| Non-current | ||
At 1 January | 1.9 | 1.6 |
Arising during the year | – | 0.3 |
At 31 December | 1.9 | 1.9 |
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185Clarkson PLC
2023 Annual Report
22 Share-based payment plans
| 2023 | 2022 | |
| £m | £m | |
Expense arising from equity-settled share-based payment transactions | 1.9 | 1.8 |
The share-based payment plans are described below. There were no cancellations or modifications to any of the plans
during 2023 or 2022.
Share options
Long-term incentive awards
Details of the long-term incentive awards are included in the Directors’ Remuneration Report on page 143. Awards made
to the Directors are given in the Directors’ Remuneration Report on page 136. The fair value of awards that are not subject
to a market-based performance condition were valued using a Black-Scholes model. The fair value of awards subject to
a market-based performance condition were valued using a stochastic model. For awards subject to a holding period
a Chaffe protective put method was used to estimate a discount for the lack of marketability.
ShareSave scheme
The ShareSave scheme (or local equivalent) enables eligible employees to acquire options to purchase ordinary shares in the
Company at a discount. To participate in the scheme, the employees are required to save a set amount each month, up to a
maximum of £500 (or local equivalent) per month, for a period of 24 to 36 months, depending on their jurisdiction. Under
the terms of the scheme, at the end of the savings period the employees are entitled to purchase shares using their savings
at a price of 15% to 20% (depending on jurisdiction) below the market price just ahead of the invitation date. Employees that
remain in service at the end of the savings period and make the required savings from their monthly salary for the savings
period will become entitled to purchase the shares. Employees who cease their employment, do not save the required
amount from their monthly salary, or elect not to exercise their option to purchase shares will be refunded their full savings.
In certain circumstances, employees who cease their employment may exercise their option to purchase shares. The fair
value of these awards was valued using a Black-Scholes model.
Movements in the year
The following table illustrates the number of, and movements in, share options during the year:
| Weighted | ||||||||
| average | ||||||||
| Outstanding | Outstanding at | Exercisable at | contractual | |||||
| at 1 January | Granted | Lapsed | Exercised | 31 December | 31 December | life | ||
| 2023 | in year | in year | in year 2023 | 2023 | Years | |||
| Long-term incentive awards | 141,518 | 43,902 | (263) | – | 185,157 | 55,947 | 7.69 | |
2019 | ShareSave | 39,386 | – | (1,561) | (37,825) | – | – | – |
2020 | ShareSave | 104,274 | – | (4,663) | (65,410) | 34,201 | 34,201 | 0.33 |
2021 | ShareSave | 34,089 | – | (11,188) | – | 22,901 | – | 1.33 |
2022 | ShareSave | 234,254 | – | (32,404) | (153) | 201,697 | – | 2.28 |
2023 | ShareSave | – | 168,443 | (2,113) | – | 166,330 | – | 3.30 |
553,521 | 212,345 | (52,192) | (103,388) | 610,286 | 90,148 | |||
1
2
3
4
5
6
The exercise prices for share options outstanding at the year-end were:
1
£nil,
2
N/A ,
3
£19.28,
4
£31.44,
5
£22.05–£22.51,
6
£21.62–£23.07.
The weighted average exercise price for each movement in share options are as follows:
| Outstanding | Outstanding at | Exercisable at | ||||
| at 1 January | Granted | Lapsed | Exercised | 31 December | 31 December | |
| 2023 | in year | in year | in year 2023 | 2023 | ||
| £ | £ | £ | £ | £ | £ | |
Long-term incentive awards | – | – | – | – | – | – |
ShareSave | 22.02 | 21.65 | 24.02 | 18.93 | 22.39 | 19.28 |
Total | 16.39 | 17.17 | 23.90 | 18.93 | 15.59 | 7.30 |
The weighted average share price at the date of exercise was £29.08.
Notes to the consolidated financial statements continued
186 Clarkson PLC
2023 Annual Report
22 Share-based payment plans continued
The following table illustrates the number of, and movements in, share options for the previous year:
| Weighted | ||||||||
| average | ||||||||
| Outstanding at | Outstanding at | Exercisable at | contractual | |||||
| 1 January | Granted | Lapsed | Exercised | 31 December | 31 December | life | ||
| 2022 | in year | in year | in year 2022 | 2022 | Years | |||
| Long-term incentive awards | 160,003 | 38,548 | – | (57,033) | 141,518 | – | 8.19 | |
2018 | ShareSave | 17, 21 8 | – | (660) | (16,558) | – | – | – |
2019 | ShareSave | 164,784 | – | (3,756) | (121,642) | 39,386 | 39,386 | 0.33 |
2020 | ShareSave | 114,001 | – | (6,581) | (3,146) | 104,274 | – | 1.33 |
2021 | ShareSave | 66,313 | – | (32,224) | – | 34,089 | – | 2.24 |
2022 | ShareSave | – | 237,327 | (3,073) | – | 234,254 | – | 3.28 |
522,319 | 275,875 | (4 6, 29 4) | (198,379) | 553,521 | 39,386 | |||
1
2
3
4
5
6
The exercise prices for share options outstanding at the year-end were:
1
£nil,
2
£22.12,
3
£18.30,
4
£19.28,
5
£31.44–£32.18,
6
£22.05–£22.51.
The weighted average exercise price for each movement in share options are as follows:
| Outstanding at | Outstanding at | Exercisable at | ||||
| 1 January | Granted | Lapsed | Exercised | 31 December | 31 December | |
| 2022 | in year | in year | in year 2022 | 2022 | ||
| £ | £ | £ | £ | £ | £ | |
Long-term incentive awards | – | – | – | – | – | – |
ShareSave | 21.21 | 22.50 | 27.95 | 18.78 | 22.02 | 18.30 |
Total | 14.71 | 19.35 | 27.95 | 13.38 | 16.39 | 18.30 |
The weighted average share price at the date of exercise was £30.92.
Significant inputs
The inputs into the models used to value options granted in the period fell within the following ranges:
2023 | 2022 | |
Share price at date of grant (£) | 27.35 –30.95 | 26.30–34.45 |
Exercise price (£) | 0.00–23.07 | 0.00–22.51 |
Expected term (years) | 2.0–3.3 | 2.0–3.3 |
Risk-free interest rate (%) | 3.7–4.7 | 1.7–4.4 |
Expected dividend yield (%) | 0.0–3.4 | 0.0–3.3 |
Expected volatility (%) | 31.5–32.5 | 32.1–35.3 |
Expected volatility is calculated using historical data, where available, over the period of time commensurate with
the remaining performance period for long-term incentive awards and the expected award term for the ShareSave scheme,
as at the date of grant.
Other employee incentives
During the year, 1,454,526 shares (2022: 562,184 shares) at a weighted average price of £30.70 (2022: £33.06) were awarded
to employees in settlement of 2022 (2021) cash bonuses.
The fair value of these shares was determined based on the market price at the date of grant.
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Notes to the consolidated financial statements continued
188 Clarkson PLC
2023 Annual Report
23 Employee benefits continued
| 2023 | 2022 | |
| £m | £m | |
Fair value of schemes’ assets | 131.3 | 134.7 |
Present value of funded defined benefit obligations | (115.5) | (115.2) |
15.8 | 19.5 | |
Effect of asset ceiling in relation to the Plowrights scheme | (2.4) | (4.1) |
Net benefit asset recognised in the balance sheet | 13.4 | 15.4 |
| 2023 | 2022 | |
| £m | £m | |
| Recognised in other finance income – pensions: | ||
Expected return on schemes’ assets | 6.5 | 3.6 |
Interest cost on benefit obligation and asset ceiling | (5.8) | (3.2) |
| Recognised in administrative expenses: | ||
Scheme administrative expenses | (1.0) | (0.8) |
Net benefit charge recognised in the income statement | (0.3) | (0.4) |
| 2023 | 2022 | |
| £m | £m | |
Actual return on schemes’ assets | 5.5 | (59.0) |
Less: expected return on schemes’ assets | (6.5) | (3.6) |
Actuarial loss on schemes’ assets | (1.0) | (62.6) |
Actuarial (loss)/gain on defined benefit obligations | (3.1) | 54.7 |
Actuarial loss recognised in the statement of comprehensive income | (4.1) | (7.9) |
Tax credit on actuarial loss | 1.0 | 1.2 |
Release of asset ceiling in relation to the Plowrights scheme | 1.9 | 1.3 |
Tax charge on asset ceiling | (0.4) | (0.2) |
Tax credit on change in tax rates | – | 0.1 |
Net actuarial loss on employee benefit obligations | (1.6) | (5.5) |
| Cumulative amount of actuarial (losses)/gains, before tax, recognised in the statement | ||
of comprehensive income | (2.7) | 1.4 |
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23 Employee benefits continued
2023 | 2022 | |||
% | £m | % | £m | |
Equities* | 1.2 | 1.6 | 1.1 | 1.5 |
Government bonds* | 30.8 | 40.5 | 39.5 | 53.2 |
Corporate bonds* | 28.7 | 37.7 | 30.4 | 40.9 |
Investment funds* | 21.9 | 28.7 | 25.6 | 34.5 |
Cash and other assets | 17.4 | 22.8 | 3.4 | 4.6 |
100.0 | 131.3 | 100.0 | 134.7 |
| Present value | Fair value of | Impact of | |||
| of obligation | plan assets | Total | asset ceiling | Total | |
| £m | £m | £m | £m | £m | |
At 1 January 2023 | (115.2) | 134.7 | 19.5 | (4.1) | 15.4 |
Expected return on assets | – | 6.5 | 6.5 | – | 6.5 |
Interest costs | (5.6) | – | (5.6) | (0.2) | (5.8) |
Employer contributions | – | 0.4 | 0.4 | – | 0.4 |
Administrative expenses | – | (1.0) | (1.0) | – | (1.0) |
Benefits paid | 8.4 | (8.3) | 0.1 | – | 0.1 |
Actuarial (loss)/gain | (3.1) | (1.0) | (4.1) | 1.9 | (2.2) |
At 31 December 2023 | (115.5) | 131.3 | 15.8 | (2.4) | 13.4 |
| Present value | Fair value of | Impact of | |||
| of obligation | plan assets | Total | asset ceiling | Total | |
| £m | £m | £m | £m | £m | |
At 1 January 2022 | (174. 2) | 201.5 | 27.3 | (5.3) | 22.0 |
Expected return on assets | – | 3.6 | 3.6 | – | 3.6 |
Interest costs | (3.1) | – | (3.1) | (0.1) | (3.2) |
Employer contributions | – | 0.4 | 0.4 | – | 0.4 |
Administrative expenses | – | (0.8) | (0.8) | – | (0.8) |
Benefits paid | 7.4 | (7.4) | – | – | – |
Actuarial gain/(loss) | 54.7 | (62.6) | ( 7.9) | 1.3 | (6.6) |
At 31 December 2022 | (115.2) | 134.7 | 19.5 | (4 .1) | 15.4 |
| 2023 | 2022 | |
| % | % | |
Rate of increase in pensions in payment | 3.1 | 3.1 |
Price inflation (RPI) | 3.1/3.2 | 3.3 |
Price inflation (CPI) | 2.8 | 2.8 |
Discount rate for scheme liabilities | 4.8 | 5.0 |
Notes to the consolidated financial statements continued
190 Clarkson PLC
2023 Annual Report
23 Employee benefits continued
| Additional years | |||
2023 | 2022 | ||
| Post-retirement life expectancy on retirement at age 65: | |||
Employees retiring in the year | – male | 22.7 | 22.2–23.5 |
– female | 23.9–24.7 | 24.5–25.2 | |
Employees retiring in 20 years’ time | – male | 23.5–24.0 | 23.5–24.8 |
– female | 25.3–26.0 | 25.9–26.6 |
| 2023 | 2022 | |
| £m | £m | |
Experience loss on schemes’ assets | (1.0) | (62.6) |
Gain/(loss) on schemes’ liabilities due to changes in demographic assumptions | 2.9 | (0.3) |
(Loss)/gain on schemes’ liabilities due to changes in financial assumptions | (3.7) | 67.6 |
Loss on schemes’ liabilities due to experience adjustments | (2.3) | (12.6) |
Gain on asset ceiling | 1.9 | 1.3 |
Actuarial loss | (2.2) | (6.6) |
Income tax credit on actuarial loss | 0.6 | 1.1 |
Actuarial loss – net of tax | (1.6) | (5.5) |
2023 | 2022 | |||
| Change in | Change in | |||
| defined | defined | |||
| Change in | benefit | Change in | benefit | |
| assumption | obligation | assumption | obligation | |
| % | % | % | % | |
Discount rate for scheme liabilities | 0.25 | (2.9) | 0.25 | (2.9) |
(0.25) | 3.1 | (0.25) | 3.1 | |
Price inflation (RPI) | 0.25 | 2.4 | 0.25 | 2.4 |
(0.25) | (2.4) | (0.25) | (2.3) |
| Number of | 2023 | Number of | 2022 | |
| shares | £m | shares | £m | |
At 1 January | 30,622,110 | 7.7 | 30,480,764 | 7.6 |
Additions | 103,388 | – | 141,346 | 0.1 |
At 31 December | 30,725,498 | 7.7 | 30,622,110 | 7.7 |
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2023 Annual Report
| Employee | Capital | Currency | ||||||
| Share | ESOP | benefits | redemption | Hedging | Merger | translation | ||
| premium | reserve | reserve | reserve | reserve | reserve | reserve | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
At 1 January 2023 | 36.5 | – | 3.7 | 2.0 | (5.1) | 55.7 | 22.0 | 114.8 |
Other comprehensive income/(loss): | ||||||||
Foreign exchange differences on retranslation of foreign operations | – | – | – | – | – | – | ( 17.2) | ( 17.2) |
| Foreign currency hedges recycled | ||||||||
to profit or loss – net of tax | – | – | – | – | 2.1 | – | – | 2.1 |
| Foreign currency hedge | ||||||||
revaluations – net of tax | – | – | – | – | 5.7 | – | – | 5.7 |
Total other comprehensive income/(loss) | – | – | – | – | 7.8 | – | (17. 2) | (9.4) |
Share issues | 1.9 | – | – | – | – | – | – | 1.9 |
| Employee share schemes: | ||||||||
Share-based payments expense | – | – | 1.9 | – | – | – | – | 1.9 |
| Transfer to profit and loss | ||||||||
on vesting | – | – | (1.5) | – | – | – | – | (1.5) |
ESOP shares acquired | – | (49.5) | – | – | – | – | – | (49.5) |
Equity-settled liabilities | – | 46.7 | – | – | – | – | – | 46.7 |
Total employee share schemes | – | (2.8) | 0.4 | – | – | – | – | (2.4) |
At 31 December 2023 | 38.4 | (2.8) | 4.1 | 2.0 | 2.7 | 55.7 | 4.8 | 104.9 |
| Employee | Capital | Currency | ||||||
| Share | ESOP | benefits | redemption | Hedging | Merger | translation | ||
| premium | reserve | reserve | reserve | reserve | reserve | reserve | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
At 1 January 2022 | 33.9 | (0.5) | 3.9 | 2.0 | 0.5 | 55.7 | 8.5 | 104.0 |
| Other comprehensive | ||||||||
| (loss)/income: | ||||||||
Foreign exchange differences on retranslation of foreign operations | – | – | – | – | – | – | 13.5 | 13.5 |
| Foreign currency hedges recycled | ||||||||
to profit or loss – net of tax | – | – | – | – | 3.3 | – | – | 3.3 |
| Foreign currency hedge | ||||||||
revaluations – net of tax | – | – | – | – | (8.9) | – | – | (8.9) |
| Total other comprehensive | ||||||||
(loss)/income | – | – | – | – | (5.6) | – | 13.5 | 7.9 |
Share issues | 2.6 | – | – | – | – | – | – | 2.6 |
| Employee share schemes: | ||||||||
Share-based payments expense | – | – | 1.8 | – | – | – | – | 1.8 |
| Transfer to profit and loss | ||||||||
on vesting | – | 2.0 | (2.0) | – | – | – | – | – |
ESOP shares acquired | – | (20.4) | – | – | – | – | – | (20.4) |
Equity-settled liabilities | – | 18.9 | – | – | – | – | – | 18.9 |
Total employee share schemes | – | 0.5 | (0.2) | – | – | – | – | 0.3 |
At 31 December 2022 | 36.5 | – | 3.7 | 2.0 | (5.1) | 55.7 | 22.0 | 114.8 |
Notes to the consolidated financial statements continued
192 Clarkson PLC
2023 Annual Report
25 Other reserves continued
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| Less than | 3 to 12 | 1 to 5 | 5 to 10 | ||
| 3 months | months | years | years | Total | |
| £m | £m | £m | £m | £m | |
Trade and other payables | 54.0 | – | 3.2 | – | 57. 2 |
Deferred consideration | 0.4 | – | – | – | 0.4 |
Lease liabilities | 3.2 | 8.6 | 30.8 | 6.0 | 48.6 |
57.6 | 8.6 | 34.0 | 6.0 | 106.2 |
| Less than | 3 to 12 | 1 to 5 | 5 to 10 | ||
| 3 months | months | years | years | Total | |
| £m | £m | £m | £m | £m | |
Trade and other payables | 59.8 | 0.7 | 2.5 | – | 63.0 |
| Gross settled foreign currency contracts: | |||||
Outflow | 10.4 | 55.7 | 78.3 | – | 144.4 |
Inflow | (9.2) | (53.2) | (75.0) | – | (137.4) |
Lease liabilities | 2.9 | 8.6 | 33.3 | 9.4 | 54.2 |
63.9 | 11.8 | 39.1 | 9.4 | 124.2 |
Notes to the consolidated financial statements continued
194 Clarkson PLC
2023 Annual Report
28 Financial risk management objectives and policies continued
2023 | 2022 | |||||
| Interest- | Interest- | |||||
| bearing | bearing | |||||
| loans and | Lease | loans and | Lease | |||
| borrowings | liabilities | Total | borrowings | liabilities | Total | |
| £m | £m | £m | £m | £m | £m | |
At 1 January | – | 47.6 | 47.6 | – | 53.8 | 53.8 |
Arising on acquisitions | 0.5 | 3.5 | 4.0 | 0.6 | – | 0.6 |
Cash flows – principal | (0.5) | (10.5) | (11.0) | (0.6) | (11.2) | (11.8) |
Cash flows – interest | – | (1.7) | (1.7) | – | (1.9) | (1.9) |
Interest charges | – | 1.7 | 1.7 | – | 1.9 | 1.9 |
Other non-cash movements | – | 4.1 | 4.1 | – | 6.2 | 6.2 |
Foreign exchange differences | – | (1.5) | (1.5) | – | (1.2) | (1.2) |
At 31 December | – | 43.2 | 43.2 | – | 47.6 | 47.6 |
| Strengthening/ | Effect on | ||
| (weakening) in | profit before | Effect on | |
| rate | taxation | equity | |
| % | £m | £m | |
2023 | 5.0 | 3.4 | (3.3) |
(5.0) | (3.1) | 3.0 | |
2022 | 5.0 | 2.2 | (4. 9) |
(5.0) | (2.0) | 4.5 |
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28 Financial risk management objectives and policies continued
Foreign exchange risk continued
Assets | Liabilities | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Foreign currency contracts | 3.5 | 0.1 | – | 7.0 |
2023 | 2022 | |||
| Average rate | Average rate | |||
| US$m | US$/£ | US$m | US$/£ | |
For settlement in 2023 | – | – | 80.0 | 1.28 |
For settlement in 2024 | 90.0 | 1.27 | 70.0 | 1.28 |
For settlement in 2025 | 65.0 | 1.23 | 25.0 | 1.23 |
For settlement in 2026 | 10.0 | 1.26 | – | – |
2023 | 2022 | |||
| Average rate | Average rate | |||
| US$m | NOK/US$ | US$m | NOK/US$ | |
For settlement in 2023 | – | – | 24.0 | 9.81 |
For settlement in 2024 | 21.0 | 10.53 | 5.0 | 9.76 |
For settlement in 2025 | 10.0 | 10.48 | – | – |
For settlement in 2026 | 5.0 | 10.97 | – | – |
Notes to the consolidated financial statements continued
196 Clarkson PLC
2023 Annual Report
29 Financial instruments
Level 1 | Level 2 | Level 3 | ||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | £m | £m | |
| Assets | ||||||
Investments at fair value through profit or loss (‘FVPL’) | 0.3 | 0.5 | 1.2 | 1.1 | – | – |
Foreign currency contracts | – | – | 3.5 | 0.1 | – | – |
0.3 | 0.5 | 4.7 | 1.2 | – | – | |
| Liabilities | ||||||
Foreign currency contracts | – | – | – | 7.0 | – | – |
– | – | – | 7.0 | – | – |
2023 | 2022 | |||||||
| Fair value | Fair value | |||||||
| through | through | |||||||
| Hedging | profit or | Amortised | Hedging | profit or | Amortised | |||
| instruments | loss | cost | Total | instruments | loss | cost | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
Other receivables | – | – | 13.1 | 13.1 | – | – | 12.9 | 12.9 |
Investments | – | 1.5 | 39.9 | 41.4 | – | 1.6 | 3.1 | 4.7 |
Trade receivables | – | – | 121.7 | 121.7 | – | – | 127. 2 | 127. 2 |
Foreign currency contracts | 3.5 | – | – | 3.5 | 0.1 | – | – | 0.1 |
Cash and cash equivalents | – | – | 398.9 | 398.9 | – | – | 384.4 | 384.4 |
3.5 | 1.5 | 573.6 | 578.6 | 0.1 | 1.6 | 527.6 | 529.3 |
2023 | 2022 | |||||
| Hedging | Amortised | Hedging | Amortised | |||
| instruments | cost | Total | instruments | cost | Total | |
| £m | £m | £m | £m | £m | £m | |
Trade payables | – | 34.4 | 34.4 | – | 50.0 | 50.0 |
Other payables | – | 22.8 | 22.8 | – | 13.0 | 13.0 |
Foreign currency contracts | – | – | – | 7.0 | – | 7.0 |
Deferred consideration | – | 0.4 | 0.4 | – | – | – |
Lease liabilities | – | 43.2 | 43.2 | – | 47.6 | 47.6 |
– | 100.8 | 100.8 | 7.0 | 110.6 | 117.6 |
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197Clarkson PLC
2023 Annual Report
30 Related party transactions
As in 2022, the Group did not enter into any related party transactions during the year, except as noted below.
As mentioned in the biographies in the Board of Directors on page 106, Sue Harris is a Non-Executive Director of Schroder &
Co. Limited and Chair of the Audit and Risk Committee of the Wealth Management Division. Another Schroder Group company
is one of the investment managers of the defined benefit section of the Clarkson PLC pension scheme. In 2020, Jeff Woyda
was appointed to the Board of Trustees of The Clarkson Foundation.
| 2023 | 2022 | |
| £m | £m | |
Short-term employee benefits | 14.6 | 12.1 |
Post-employment benefits | 0.1 | 0.1 |
Share-based payments | 1.1 | 1.1 |
15.8 | 13.3 |
31 Non-controlling interest
The non-controlling interest relates to 11 entities based in Norway, in the Financial segment.
The subsidiaries that have a non-controlling interest were not material to the Group.
See page 193 of the 2022 Annual Report for the summarised financial information of the subsidiaries with a non-controlling
interest to the Group in 2022.
Notes to the consolidated financial statements continued
198 Clarkson PLC
2023 Annual Report
Note
2023
£m
2022
£m
Non-current assets
Property, plant and equipment C 9.6 11.0
Investment properties D 0.3 0.3
Right-of-use assets E 14.6 17. 2
Investments in subsidiaries F 167. 2 167. 2
Employee benefits P 13.8 15.8
Deferred tax assets G 2.1 –
207.6 211.5
Current assets
Trade and other receivables H 95.2 93.1
Income tax receivable 7.8 6.2
Investments I 0.5 0.5
Cash and cash equivalents J 20.2 0.3
123.7 100.1
Current liabilities
Trade and other payables K (43.3) (28.2)
Lease liabilities L (3.3) (3.2)
(46.6) (31.4)
Net current assets 77.1 68.7
Non-current liabilities
Lease liabilities L (15.9) (19.2)
Provisions M (1.1) (1.1)
Deferred tax liabilities N – (0.9)
(17.0) (21.2)
Net assets 267.7 259.0
Capital and reserves
Share capital Q 7.7 7.7
Other reserves R 100.2 97.9
Retained earnings 159.8 153.4
Total equity 267.7 259.0
The Company’s profit for the year was £36.8m (2022: £56.0m).
The financial statements on pages 199 to 218 were approved by the Board on 1 March 2024, and signed on its behalf by:
Laurence Hollingworth Jeff Woyda
Chair Chief Financial Officer & Chief Operating Officer
Registered number: 1190238
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199Clarkson PLC
2023 Annual Report
Parent Company balance sheet
as at 31 December
Attributable to equity holders of the Parent Company
Note
Share
capital
£m
Other
reserves
£m
Retained
earnings
£m
Total equity
£m
Balance at 1 January 2023 7.7 97.9 153.4 259.0
Profit for the year – – 36.8 36.8
Other comprehensive expense:
Actuarial loss on employee benefit schemes – net of tax P – – (1.4) (1.4)
Total comprehensive income for the year – – 35.4 35.4
Transactions with owners:
Share issues R – 1.9 – 1.9
Employee share schemes – 0.4 (1.1) (0.7)
Tax on other employee benefits – – 0.3 0.3
Tax on other items in equity – – 0.1 0.1
Dividend paid B – – (28.3) (28.3)
Total transactions with owners – 2.3 (29.0) (26.7)
Balance at 31 December 2023 7.7 100.2 159.8 267.7
Attributable to equity holders of the Parent Company
Note
Share
capital
£m
Other
reserves
£m
Retained
earnings
£m
Total equit y
£m
Balance at 1 January 2022 7.6 95.5 132.0 235.1
Profit for the year – – 56.0 56.0
Other comprehensive expense:
Actuarial loss on employee benefit schemes – net of tax P – – (7.9) (7.9)
Total comprehensive income for the year – – 48.1 48.1
Transactions with owners:
Share issues R 0.1 2.6 – 2.7
Employee share schemes – (0.2) (1.3) (1.5)
Tax on other employee benefits – – 0.5 0.5
Dividend paid B – – (25.9) (25.9)
Total transactions with owners 0.1 2.4 (26.7) (24.2)
Balance at 31 December 2022 7.7 97.9 153.4 259.0
200 Clarkson PLC
2023 Annual Report
Parent Company statement of changes in equity
for the year ended 31 December
Note(s)
2023
£m
2022
£m
Cash flows from operating activities
Profit before taxation 33.0 49.4
Adjustments for:
Foreign exchange differences (0.1) (0.3)
Depreciation C, D, E 4.6 4.4
Share-based payment expense 1.1 1.1
Impairment of investment in subsidiaries F – 0.8
Difference between pension contributions paid and amount recognised
in the income statement 1.0 0.7
Gain on sale of property, plant and equipment (3.5) –
Finance income (49.9) (71.4)
Finance costs 0.6 0.7
Other finance income – pensions (0.8) (0.5)
Increase in trade and other receivables (3.7) (37.8)
Increase in bonus accrual 0.7 9.6
Increase in trade and other payables 14.3 1.5
Cash utilised from operations (2.7) (41 . 8)
Income tax received – –
Net cash flow from operating activities (2.7) (41. 8)
Cash flows from investing activities
Interest received 0.2 –
Purchase of property, plant and equipment C (0.6) (1.8)
Proceeds from sale of property, plant and equipment I 3.6 –
Dividends received from investments 49.6 71.4
Net cash flow from investing activities 52.8 69.6
Cash flows from financing activities
Interest paid (0.6) (0.7)
Dividend paid B (28.3) (25.9)
Payments of lease liabilities (3.2) (3.7)
Proceeds from shares issued 1.9 2.7
Net cash flow from financing activities (30.2) (27.6)
Net increase in cash and cash equivalents 19.9 0.2
Cash and cash equivalents at 1 January 0.3 0.1
Cash and cash equivalents at 31 December J 20.2 0.3
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201Clarkson PLC
2023 Annual Report
Parent Company cash flow statement
for the year ended 31 December
A Statement of accounting policies
The accounting policies applied in the preparation of the Parent Company financial statements are the same as those set out
in note 2 to the consolidated financial statements, and have been applied consistently to all periods.
Statement of compliance
The financial statements of Clarkson PLC have been prepared in accordance with UK-adopted international accounting
standards in conformity with the requirements of the Companies Act 2006 (‘UK IFRS’) and the applicable legal
requirements of the Companies Act 2006.
The Parent Company’s functional and presentational currency is pounds sterling.
The Parent Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the
Parent Company income statement or statement of comprehensive income. The profit for the Parent Company for the year
was £36.8m (2022: £56.0m).
Changes in accounting policy and disclosures
As stated in note 2 to the consolidated financial statements, there were no new standards, amendments or interpretations,
effective for the first time for the financial year beginning on or after 1 January 2023, that had a material impact on the
Parent Company.
Critical accounting judgements and estimates
Impairment of investments in subsidiaries
Determining whether investments in subsidiaries are impaired requires an estimation of the value-in-use of the subsidiary.
The value-in-use calculation requires estimation of future cash flows expected to arise for the subsidiary, the selection of
suitable discount rates and the estimation of future growth rates. As determining such assumptions is inherently uncertain
and subject to future factors, there is the potential these may differ in subsequent periods and therefore materially change
the conclusions reached.
Investments in subsidiaries
The Parent Company recognises its investments in subsidiaries at cost less provision for impairment. The Parent Company
assesses at each reporting date whether there is an indication that an investment may be impaired. If any such indication
exists, the Parent Company estimates the investment’s recoverable amount. An investment’s recoverable amount is the
higher of its fair value less costs to sell and its value-in-use, and is determined for an individual investment. Where the
carrying amount of an investment exceeds its recoverable amount, the investment is considered impaired and is written
down to its recoverable amount. In assessing value-in-use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the investment.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such indication exists, the Parent Company makes an estimate of
recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the investment’s recoverable amount since the last impairment loss was recognised. If that is the case,
the carrying amount of the investment is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the
investment in prior years.
Share-based payment transactions
The fair value of the compensation given to subsidiaries in respect of share-based payments is recognised as a capital
contribution over the vesting period, reduced by any payments received from subsidiaries.
B Dividends
2023
£m
2022
£m
Declared and paid during the year:
Final dividend for 2022 of 64p per share (2021: 57p per share) 19.3 17. 2
Interim dividend for 2023 of 30p per share (2022: 29p per share) 9.0 8.7
Dividend paid 28.3 25.9
Proposed for approval at the AGM (not recognised as a liability at 31 December):
Final dividend for 2023 proposed of 72p per share (2022: 64p per share) 22.1 19.6
202 Clarkson PLC
2023 Annual Report
Notes to the Parent Company financial statements
C Property, plant and equipment
31 December 2023
Freehold
and long
leasehold
properties
£m
Leasehold
improvements
£m
Office
furniture and
equipment
£m
Total
£m
Original cost
At 1 January 2023 1.9 14.4 10.2 26.5
Additions – – 0.6 0.6
Disposals (0.2) – – (0.2)
At 31 December 2023 1.7 14.4 10.8 26.9
Accumulated depreciation
At 1 January 2023 0.7 7.6 7. 2 15.5
Charged during the year – 1.0 1.0 2.0
Disposals (0.2) – – (0.2)
At 31 December 2023 0.5 8.6 8.2 17.3
Net book value at 31 December 2023 1.2 5.8 2.6 9.6
31 December 2022
Freehold
and long
leasehold
properties
£m
Leasehold
improvements
£m
Office
furniture and
equipment
£m
Total
£m
Original cost
At 1 January 2022 1.9 14.4 8.4 24.7
Additions – – 1.8 1.8
At 31 December 2022 1.9 14.4 10.2 26.5
Accumulated depreciation
At 1 January 2022 0.6 6.5 6.5 13.6
Charged during the year 0.1 1.1 0.7 1.9
At 31 December 2022 0.7 7.6 7.2 15.5
Net book value at 31 December 2022 1.2 6.8 3.0 11.0
D Investment properties
2023
£m
2022
£m
Cost
At 1 January and 31 December 0.6 0.6
Accumulated depreciation
At 1 January 0.3 0.3
Charged during the year* – –
At 31 December 0.3 0.3
Net book value at 31 December 0.3 0.3
* The depreciation charged during the year was less than £0.1m.
The fair value of the investment property at 31 December 2023 was £0.8m (2022: £0.9m). This was based on a valuation
from an external independent valuer who has the appropriate professional qualification and recent experience of valuing
properties in the location and of the type being valued.
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203Clarkson PLC
2023 Annual Report
E Right-of-use assets
2023
£m
2022
£m
Cost
At 1 January and 31 December 26.5 26.5
Accumulated depreciation
At 1 January 9.3 6.8
Charged during the year 2.6 2.5
At 31 December 11.9 9.3
Net book value at 31 December 14.6 17. 2
F Investments in subsidiaries
2023
£m
2022
£m
Cost
At 1 January 167.2 168.0
Impairment – (0.8)
At 31 December 167. 2 167.2
In 2022 an impairment in Clarksons Platou (Italia) Srl (in liquidation) of £0.8m was taken, reducing Clarkson PLC’s investment
in the subsidiary to £nil. As the investment in Clarksons Norway AS (formerly Clarksons Platou AS) was subject to impairment
in previous years, sensitivity analysis has been carried out using reasonably possible changes to key assumptions, none of
which cause an impairment. An increase in the discount rate of 0.5% would decrease value-in-use by £5.3m and a decrease
in pre-tax cash flows of 5% would decrease value-in-use by £7.1m.
G Deferred tax assets
2023
£m
2022
£m
Employee benefits – other employee benefits 5.1 3.3
Other temporary differences 1.0 0.6
Deferred tax assets before offset 6.1 3.9
Offset with deferred tax liabilities (4.0) (3.9)
Deferred tax assets in the balance sheet 2.1 –
Deferred tax assets and liabilities are offset and reported net where appropriate. See note N.
Included in the above are deferred tax assets of £3.2m (2022: £2.6m) which are expected to be utilised within one year.
Deferred tax assets are recognised to the extent that the realisation of the related tax benefit through future taxable profits
is probable. All deferred tax movements arise from the origination and reversal of temporary differences.
There were no unrecognised tax losses in the year (2022: none)
H Trade and other receivables
2023
£m
2022
£m
Other receivables 0.3 –
Prepayments and accrued income 1.3 1.0
Owed by Group companies 93.6 92.1
95.2 93.1
The Company has no trade receivables (2022: none). All amounts owed by Group companies are payable on demand with
no interest being charged. As at 31 December 2023, the Company calculated the expected credit loss of amounts owed by
Group companies to be immaterial (2022: immaterial). Further details of related party receivables are included in note V.
I Investments
2023
£m
2022
£m
Cash on deposit 0.5 0.5
The Company held £0.5m (2022: £0.5m) in a deposit with a 95-day notice period. This deposit is held with an A-rated
financial institution.
Notes to the Parent Company financial statements continued
204 Clarkson PLC
2023 Annual Report
J Cash and cash equivalents
2023
£m
2022
£m
Cash at bank and in hand 20.2 0.3
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. The fair value of cash and cash
equivalents is £20.2m (2022: £0.3m).
K Trade and other payables
2023
£m
2022
£m
Other payables 0.2 0.1
Owed to Group companies 17.0 2.1
Bonus accruals 20.7 20.0
Other accruals 4.1 4.3
Deferred income 1.3 1.7
43.3 28.2
All amounts owed to Group companies are unsecured, interest free, have no fixed date of repayment and are repayable
on demand. Further details of related party payables are included in note V.
L Lease liabilities
2023
£m
2022
£m
Current
Lease liabilities 3.3 3.2
Non-current
Lease liabilities 15.9 19.2
M Provisions
2023
£m
2022
£m
Non-current
At 1 January and 31 December 1.1 1.1
Provisions have been recognised for the dilapidation of various leasehold premises which will be utilised on cessation of
the lease. A maturity analysis of undiscounted lease liability payments is included within note T. None of the leases contain
extension options and rentals are not linked to any index.
N Deferred tax liabilities
2023
£m
2022
£m
Employee benefits – on pension benefit asset 3.5 3.9
Other temporary differences 0.5 0.9
Deferred tax liabilities before offset 4.0 4.8
Offset with deferred tax assets (4.0) (3.9)
Deferred tax liabilities in the balance sheet – 0.9
Deferred tax assets and liabilities are offset and reported net where appropriate, see note G.
None of the above deferred tax liabilities are due within one year.
All deferred tax movements arise from the origination and reversal of temporary differences.
O Share-based payment plans
2023
£m
2022
£m
Expense arising from equity-settled, share-based payment transactions 1.1 1.1
For more information on the Parent Company’s share-based payment plans, see note 22 of the consolidated
financial statements.
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205Clarkson PLC
2023 Annual Report
P Employee benefits
The Company operates two final salary defined benefit pension schemes, being the Clarkson PLC scheme and the Plowrights
scheme, both within the UK. The schemes are both registered as occupational pension schemes with HMRC and are subject
to UK legislation and oversight from the Pensions Regulator. These are funded by the payment of contributions to separate
trusts administered by trustees who are required to act in the best interests of the schemes’ beneficiaries. Responsibility for
governance of each scheme lies with the respective board of trustees in accordance with the rules applicable to that scheme.
Currently each board of trustees includes a representative of the relevant principal employer. The schemes’ assets are
invested in a range of pooled pension investment funds managed by professional fund managers.
Defined benefit pension arrangements give rise to open-ended commitments and liabilities for the sponsoring company.
As a consequence, the Company closed its original defined benefit section of the Clarkson PLC scheme to new entrants
on 31 March 2004. This section was closed to further accrual for all existing members as from 31 March 2006. The Plowrights
scheme was closed to further accrual from 1 January 2006.
Every three years, a pension scheme must obtain from an actuary a report containing a valuation and a recommendation
on rates of contribution. UK legislation requires that pension schemes are funded prudently and must adhere to the
statutory funding objective. Triennial valuations for both schemes have been prepared as detailed below.
The actuarial valuation of the Clarkson PLC scheme shows a pension surplus on an ongoing basis of £11.5m (105%)
as at 31 March 2022. Following the 2016 valuation, Clarkson PLC and the Trustees had agreed to cease funding with
effect from 1 October 2016. Since 1 May 2021 all expenses of the scheme will be met from the surplus assets.
The actuarial valuation of the Plowrights scheme shows a pension surplus on an ongoing basis of £3.0m (108%)
as at 31 March 2022. Clarkson PLC and the Trustees agreed to cease funding with effect from 1 December 2019.
The expenses for the scheme will be met from the surplus assets.
The Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility
The schemes’ liabilities are calculated using a discount rate set with reference to corporate bond yields; if a scheme’s assets
underperform this yield, this will create a deficit. The two schemes have de-risked by replacing their equity holdings with
less volatile investments.
Changes in bond yields
A decrease in corporate bond yields will increase a scheme’s liabilities, although this will be partially offset by an increase
in the value of the schemes’ bond holdings.
Inflation risk
Some of the Company pension obligations are linked to inflation. The majority of the schemes’ assets are either unaffected
by (fixed-interest bonds) or loosely correlated with (equities) inflation, meaning that an increase in inflation will also increase
the deficit.
Life expectancy
The majority of the schemes’ obligations are to provide benefits for the life of the member, so increases in life expectancy
will result in an increase in the schemes’ liabilities.
Other pension arrangements
The Company operates a defined contribution pension scheme. Where required, the Company also makes contributions
to this scheme.
The Company incurs no material expenses in the provision of post-retirement benefits other than pensions.
The following information relates to the sum of the two separate schemes.
Notes to the Parent Company financial statements continued
206 Clarkson PLC
2023 Annual Report
P Employee benefits continued
The following tables summarise amounts recognised in the balance sheet and the components of net benefit charge
recognised in the income statement:
Recognised in the balance sheet
2023
£m
2022
£m
Fair value of schemes’ assets 120.6 124.4
Present value of funded defined benefit obligations (104.4) (104.5)
16.2 19.9
Effect of asset ceiling in relation to the Plowrights scheme (2.4) (4.1)
Net benefit asset recognised in the balance sheet 13.8 15.8
The net benefit asset disclosed above is the combined total of the two schemes. The Clarkson PLC scheme has a surplus
of £13.8m (2022: £15.8m) and the Plowrights scheme has a recognised surplus of £nil (2022: £nil).
The surplus in the Clarkson PLC scheme is recognised, as there are future economic benefits available in the form
of a reduction in future contributions to the defined contribution section of the scheme and, in the event of wind up, excess
surplus is refundable to the Company. There are no such future economic benefits in respect of the Plowrights scheme and
therefore the surplus of £2.4m (2022: £4.1m) cannot be recognised.
A deferred tax liability on the benefit asset of £3.5m (2022: £3.9m) is shown in note N.
Recognised in the income statement
2023
£m
2022
£m
Recognised in other finance income – pensions:
Expected return on schemes’ assets 6.0 3.4
Interest cost on benefit obligation and asset ceiling (5.2) (2.9)
Recognised in administrative expenses:
Schemes’ administrative expenses (1.0) (0.7)
Net benefit charge recognised in the income statement (0.2) (0.2)
Recognised in the statement of comprehensive income
2023
£m
2022
£m
Actual return on schemes’ assets 5.1 (55.7)
Less: expected return on schemes’ assets (6.0) (3.4)
Actuarial loss on schemes’ assets (0.9) (59.1)
Actuarial (loss)/gain on defined benefit obligations (2.8) 48.0
Actuarial loss recognised in the statement of comprehensive income (3.7) (11.1)
Tax credit on actuarial loss 0.8 2.1
Effect of asset ceiling in relation to the Plowrights scheme 1.9 1.3
Tax charge on asset ceiling (0.4) (0.2)
Net actuarial loss on employee benefit obligations (1.4) (7.9)
Cumulative amount of actuarial losses, before tax, recognised in the statement of
comprehensive income (4.7) (1.0)
Schemes’ assets
%
2023
£m %
2022
£m
Government bonds* 30.1 36.3 39.5 49.1
Corporate bonds* 28.4 34.3 30.4 37.8
Investment funds* 22.6 27.2 26.4 32.9
Cash and other assets 18.9 22.8 3.7 4.6
100.0 120.6 100.0 124.4
* The schemes’ assets are invested in pooled investment vehicles which are unquoted. The allocation in the table above considers the underlying
assets of these funds.
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207Clarkson PLC
2023 Annual Report
P Employee benefits continued
Net defined benefit asset
Changes in the fair value of the net defined benefit asset are as follows:
31 December 2023
Present value
of obligation
£m
Fair value of
plan assets
£m
Total
£m
Impact of
asset ceiling
£m
Total
£m
At 1 January 2023 (104.5) 124.4 19.9 (4.1) 15.8
Expected return on assets – 6.0 6.0 – 6.0
Interest costs (5.0) – (5.0) (0.2) (5.2)
Administrative expenses – (1.0) (1.0) – (1.0)
Benefits paid 7.9 (7.9) – – –
Actuarial (loss)/gain (2.8) (0.9) (3.7) 1.9 (1.8)
At 31 December 2023 (104.4) 120.6 16.2 (2.4) 13.8
31 December 2022
Present value
of obligation
£m
Fair value of
plan assets
£m
Total
£m
Impact of
asset ceiling
£m
Total
£m
At 1 January 2022 (156.6) 187.7 31.1 (5.3) 25.8
Expected return on assets – 3.4 3.4 – 3.4
Interest costs (2.8) – (2.8) (0.1) (2.9)
Administrative expenses – (0.7) (0.7) – (0.7)
Benefits paid 6.9 (6.9) – – –
Actuarial gain/(loss) 48.0 (59.1) (11.1) 1.3 (9.8)
At 31 December 2022 (104.5) 124.4 19.9 (4.1) 15.8
Based on the valuations and funding requirements including expenses, the Company does not expect to contribute
to its defined benefit pension schemes in 2024 (2023: £nil).
The principal valuation assumptions are as follows:
2023
%
2022
%
Rate of increase in pensions in payment 2.9 3.1
Price inflation (RPI) 3.1/3.2 3.3
Price inflation (CPI) 2.8 2.8
Discount rate for schemes’ liabilities 4.8 5.0
The mortality assumptions used to assess the defined benefit obligations at 31 December 2023 and 31 December 2022 are
based on the ‘SAPS’ standard mortality tables, being S3PA for the Clarkson PLC scheme with a scheme-specific adjustment
of 90% (2022: 90%) and S3PA for the Plowrights scheme with a scheme-specific adjustment of 84% for males and 98% for
females (2022: S3PA 84% for males and 98% for females). These tables have been adjusted to allow for anticipated future
improvements in life expectancy using the standard projection model published in 2023 (31 December 2022: model
published in 2022). Examples of the assumed future life expectancy are given in the table below:
Additional years
2023 2022
Post-retirement life expectancy on retirement at age 65:
Employees retiring in the year – male 22.7 23.0–23.5
– female 24.0–24.7 24.6–25.2
Employees retiring in 20 years’ time – male 23.5–24.0 24.3–24.8
– female 25.4–26.0 26.0–26.6
Notes to the Parent Company financial statements continued
208 Clarkson PLC
2023 Annual Report
P Employee benefits continued
Experience adjustments
2023
£m
2022
£m
Experience loss on schemes’ assets (0.9) (59.1)
Gain/(loss) on schemes’ liabilities due to changes in demographic assumptions 2.9 (0.3)
(Loss)/gain on schemes’ liabilities due to changes in financial assumptions (3.4) 61.2
Loss on schemes’ liabilities due to experience adjustments (2.3) (12.9)
Gain on asset ceiling 1.9 1.3
Actuarial loss (1.8) (9.8)
Income tax credit on actuarial loss 0.4 1.9
Actuarial loss – net of tax (1.4) (7.9)
Sensitivities
The table below shows the sensitivity of the defined benefit obligation to changes to the most significant actuarial assumptions.
The impact of changes to each assumption is shown in isolation although, in practice, changes to assumptions may occur
at the same time and can either offset or compound the overall impact on the defined benefit obligation. A change of 0.25%
is deemed appropriate given the movement in assumptions during the current and previous years. The sensitivities have
been calculated using the same methodology as the main calculations. The weighted average duration of the defined
obligation is 13 years.
2023 2022
Change in
assumption
%
Change in
defined
benefit
obligation
%
Change in
assumption
%
Change in
defined
benefit
obligation
%
Discount rate for scheme liabilities 0.25 (2.9) 0.25 (2.9)
(0.25) 3.1 (0.25) 3.1
Price inflation (RPI) 0.25 2.7 0.25 2.7
(0.25) (2.6) (0.25) (2.6)
An increase of one year in the assumed life expectancy for both males and females would increase the defined benefit
obligation by 3.4% (2022: 3.2%).
Q Share capital
Ordinary shares of 25p each, issued and fully paid:
Number of
shares
2023
£m
Number of
shares
2022
£m
At 1 January 30,622,110 7.7 30,480,764 7.6
Additions 103,388 – 141,346 0.1
At 31 December 30,725,498 7.7 30,622,110 7.7
During the year, the Company issued 103,388 shares (2022: 141,346) in relation to the ShareSave scheme. The difference
between the exercise price, ranging from £18.30-£22.51 (2022: £18.30-£22.12), and the nominal value of £0.25 was taken
to the share premium account, see note R.
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209Clarkson PLC
2023 Annual Report
R Other reserves
31 December 2023
Share
premium
£m
Employee
benefits
reserve
£m
Capital
redemption
reserve
£m
Merger
reserve
£m
Total
£m
At 1 January 2023 36.5 3.7 2.0 55.7 97.9
Share issues 1.9 – – – 1.9
Employee share schemes:
Share-based payments expense – 1.9 – – 1.9
Transfer to profit and loss on vesting – (1.5) – – (1.5)
Total employee share schemes – 0.4 – – 0.4
At 31 December 2023 38.4 4.1 2.0 55.7 100.2
31 December 2022
Share
premium
£m
Employee
benefits
reserve
£m
Capital
redemption
reserve
£m
Merger
reserve
£m
Total
£m
At 1 January 2022 33.9 3.9 2.0 55.7 95.5
Share issues 2.6 – – – 2.6
Employee share schemes:
Share-based payments expense – 1.8 – – 1.8
Transfer to profit and loss on vesting – (2.0) – – (2.0)
Total employee share schemes – (0.2) – – (0.2)
At 31 December 2022 36.5 3.7 2.0 55.7 97.9
Nature and purpose of other reserves
Employee benefits reserve
The employee benefits reserve is used to record the value of equity-settled share-based payments provided to employees.
Capital redemption reserve
The capital redemption reserve arose on previous share buy-backs by the Company.
Merger reserve
This comprises the premium on the share placing in November 2014 and the shares issued in February 2015 as part of the
acquisition of Clarksons Norway AS (formerly Clarksons Platou AS/RS Platou ASA). No share premium is recorded in the
financial statements, through the operation of the merger relief provisions of the Companies Act 2006.
Notes to the Parent Company financial statements continued
210 Clarkson PLC
2023 Annual Report
S Financial commitments and contingencies
Contingencies
The Company has given no financial commitments to suppliers (2022: none).
The Company has given no guarantees (2022: none).
From time to time the Company may be engaged in litigation in the ordinary course of business. The Company carries
professional indemnity insurance. There are currently no liabilities expected to have a material adverse financial impact
on the Company’s results or net assets.
The Company maintained throughout the year Directors’ and Officers’ liability insurance in respect of itself and its Directors.
T Financial risk management objectives and policies
The Company’s principal financial liabilities comprise loans from Group companies and lease liabilities. The Company
has various financial assets such as current asset investments, loans to Group companies and cash and cash equivalents,
which arise directly from its operations.
The Company has not entered into any derivative transactions.
The main risks arising from the Company’s financial instruments are credit risk and liquidity risk.
Credit risk
With respect to credit risk arising from cash and cash equivalents and current investments, the Company’s exposure
to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of
these instruments.
Liquidity risk
The Company monitors its risk to a shortage of funds using projected cash flows from operations.
The tables below summarise the maturity profile of the Company’s financial liabilities at 31 December based on contractual
undiscounted payments.
31 December 2023
Less than
3 months
£m
3 to 12
months
£m
1 to 5
years
£m
5 to 10
years
£m
Total
£m
Trade and other payables 0.2 – – – 0.2
Lease liabilities 0.9 2.8 15.1 3.2 22.0
1.1 2.8 15.1 3.2 22.2
31 December 2022
Less than
3 months
£m
3 to 12
months
£m
1 to 5
years
£m
5 to 10
years
£m
Total
£m
Lease liabilities 0.9 2.8 15.1 7.0 25.8
The following table shows the total liabilities arising from financing activities.
2023 2022
Lease
liabilities
£m
Total
£m
Lease
liabilities
£m
Total
£m
At 1 January 22.4 22.4 26.1 26.1
Cash flows – principal (3.2) (3.2) (3.7) (3.7)
Cash flows – interest (0.6) (0.6) (0.7) (0.7)
Interest charges 0.6 0.6 0.7 0.7
At 31 December 19.2 19.2 22.4 22.4
Capital management
For information on the Parent Company capital management objectives, policies and processes, see note 28 of the consolidated
financial statements.
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211Clarkson PLC
2023 Annual Report
U Financial instruments
The classification of financial assets and liabilities at 31 December is as follows:
Financial assets
2023 2022
Amortised
cost
£m
Total
£m
Amortised
cost
£m
Total
£m
Other receivables 0.3 0.3 – –
Owed by Group companies 93.6 93.6 92.1 92.1
Investments 0.5 0.5 0.5 0.5
Cash and cash equivalents 20.2 20.2 0.3 0.3
114.6 114.6 92.9 92.9
Financial liabilities
2023 2022
Amortised
cost
£m
Total
£m
Amortised
cost
£m
Total
£m
Other payables 0.2 0.2 0.1 0.1
Owed to Group companies 17.0 17.0 2.1 2.1
Lease liabilities 19.2 19.2 22.4 22.4
36.4 36.4 24.6 24.6
V Related party transactions
During the year, the Company entered into transactions, in the ordinary course of business, with related parties.
Transactions with subsidiaries during the year were as follows:
2023
£m
2022
£m
Management fees charged 2.7 2.6
Rent receivable 6.7 6.2
Dividends received 49.6 71.4
Balances with subsidiaries at 31 December were as follows:
2023
£m
2022
£m
Amounts owed by related parties 93.6 92.1
Amounts owed to related parties (17.0) (2.1)
Deferred income (1.3) (1.7)
There were no terms or conditions attached to these balances. The increased amounts owed by related parties are
predominantly due to net movements with H. Clarkson & Company Limited, the principal banking entity in the UK, which
sometimes receives/pays out money on behalf of Clarkson PLC.
As mentioned in the biographies in the Board of Directors on page 106, Sue Harris is a Non-Executive Director of Schroder &
Co. Limited and Chair of the Audit and Risk Committee of the Wealth Management Division. Another Schroder Group company
is one of the investment managers of the defined benefit section of the Clarkson PLC pension scheme. In 2020, Jeff Woyda
was appointed to the Board of Trustees of The Clarkson Foundation.
Compensation of key management personnel (including Directors)
There were no key management personnel in the Company apart from the Clarkson PLC Directors. Details of their
compensation are set out in note 30 to the consolidated financial statements.
Notes to the Parent Company financial statements continued
212 Clarkson PLC
2023 Annual Report
W Subsidiaries
The Parent Company had the following subsidiaries at 31 December 2023. All shares in subsidiary companies are ordinary
share capital, unless otherwise stated.
Company name
Country of
incorporation Registered office address
Proportion
of shares
held directly
by the Parent
Company (%)
Proportion
of shares
held by the
Group or its
nominees (%) Principal activity
Afromar Properties
(Pty) Limited
South Africa 23 Halifax Street, Bryanston,
Johannesburg, 2191, South Africa
100 Non-trading
Boxton Holding AS Norway Munkedamsveien 62C, 0270 Oslo,
Norway
100 Non-trading
Calypso Shipping
Investments Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Clarkson Australia
Holdings Pty Ltd
Australia Level 9, 16 St Georges Terrace, Perth
WA 6000, Australia
100 Holding company
Clarkson Capital
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Holding company
Clarkson Dry Cargo
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Clarkson Hellas Ltd.
(1)
Marshall
Islands
Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, MH
96960, Marshall Islands
100 Shipbroking
Clarkson Holdings
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Holding company
Clarkson IQ Limited United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Clarkson Morocco
S.A.R.L.
Morocco 8, Rue Ali Abderrazzak, 3è étage,
Casablanca, 20000, Morocco
100 Shipbroking
Clarkson Overseas
Shipbroking Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Holding company
Clarkson Port Services
Holdings B.V.
Netherlands Westerlaan 11, 3016 CK, Rotterdam,
Netherlands
100 Holding company
Clarkson Port Services
B.V.
Netherlands Scheepmakersweg 5, 1786PD, Den
Helder, Netherlands
100 Provision of ship
agency, port
services and cargo
handling
Clarkson Port Services
Holdings LLC
United
States
Universal Registered Agents, Inc., 300
Creek View Road, Suite 209, Newark
19711, United States
100
(2)
Dormant
Clarkson Port Services
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Provision of ship
agency and port
services
Clarkson Property
Holdings Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Non-trading
Clarkson Research
Holdings Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Holding company
Clarkson Research
Services Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Provision of data
and intelligence to
the shipping, trade,
offshore and
energy sectors
Clarkson Sale and
Purchase Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
(1) Has a branch in Greece.
(2) Membership interest.
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213Clarkson PLC
2023 Annual Report
Company name
Country of
incorporation Registered office address
Proportion
of shares
held directly
by the Parent
Company (%)
Proportion
of shares
held by the
Group or its
nominees (%) Principal activity
Clarkson Shipbrokers
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Clarkson Shipbroking
Group Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Holding company
Clarkson Shipping
Agency S.A.E.
Egypt City Stars, Capital F2, G03, Nasr City,
Egypt
100 Shipping and
maritime agency
services
Clarkson Shipping
Investments Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Clarkson Shipping
Services Acquisition
(USA) LLC
United
States
1333 West Loop South, Suite 1100,
Houston TX 77027, United States
100
(3)
Dormant
Clarkson Shipping
Services India Private
Limited
India 507-508 The Address, 1 Golf Course
Road, Sector 56, Gurgaon, 122011,
India
100 Shipbroking
Clarkson Tankers
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Clarkson Valuations
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Provision of
valuation services
to the shipping and
offshore sectors
Clarksons Australia Pty
Limited
Australia Level 9, 16 St Georges Terrace, Perth
WA 6000, Australia
100 Shipbroking
Clarksons Business
Management AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
50.01 Shipping and
offshore project
syndication
Clarksons Denmark
ApS
Denmark Philip Heymans Alle 29, 2. Th, 2900
Hellerup, Denmark
100 Shipbroking
Clarksons Deutschland
GmbH
Germany Johannisbollwerk 20, 5.fl, 20459,
Hamburg, Germany
100 Shipbroking
Clarksons DMCC United Arab
Emirates
Unit No: B3-14-01 A, Gold Tower (AU),
Plot No: JLT-PH1-I3A, Jumeirah Lakes
Towers, Dubai, United Arab Emirates
100 Shipbroking
Clarksons ESG Core
Plus AS
Norway c/o Clarksons Platou Prop. Mngt. As,
Munkedamsveien 62C, Oslo, 0270,
Norway
50.01 Real estate and
alternative
investment fund
Clarksons Hong Kong
Limited
(4)
Hong Kong 3209-14, Sun Hung Kai Centre, 30
Harbour Road, Wanchai, Hong Kong
100 Shipbroking
Clarksons Japan K.K. Japan Otemachi Financial City South Tower,
15th Floor, 1-9-7 Otemachi,
Chiyoda-ku, Tokyo, 100-0004, Japan
100 Shipbroking
Clarksons Korea
Limited
Republic of
Korea
#602, 6F Shin-A, 50, Seosomun-ro
11-gil, Jung-gu, Seoul, 04515,
Republic of Korea
100 Shipbroking
Clarksons Martankers,
S.L.U.
Spain Paseo del Pintor Rosales, 38, 28008,
Madrid, Spain
100 Shipbroking
Clarksons Netherlands
B.V.
Netherlands Westerlaan 11, 3016 CK, Rotterdam,
Netherlands
100 Shipbroking
Clarksons Norway AS Norway Munkedamsveien 62C, Oslo, 0270,
Norway
100 Shipbroking
W Subsidiaries continued
(3) Membership interest.
(4) Has a branch in China.
Notes to the Parent Company financial statements continued
214 Clarkson PLC
2023 Annual Report
Company name
Country of
incorporation Registered office address
Proportion
of shares
held directly
by the Parent
Company (%)
Proportion
of shares
held by the
Group or its
nominees (%) Principal activity
Clarksons Offshore and
Renewables Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Shipbroking
Clarksons Brasil Ltda. Brazil Avenida Rio Branco, 89-1601, Centro,
Rio de Janeiro, 20040-004, Brazil
100 Shipbroking
Clarksons Platou (Italia)
Srl in liquidazione
Italy Via San Vincenzo 2, 16145, Genova,
Italy
100 Shipbroking
Clarksons Platou
Commodities USA LLC
United
States
251 Little Falls Drive, Wilmington, New
Castle County DE 19808, United
States
100
(5)
Introducing broker
for LPG swaps
Clarksons Platou
Futures Limited
(6)
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Brokerage of
shipping-related
derivative financial
instruments
Clarksons Project
Development AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
50.29 Real estate project
management
Clarksons Project
Finance AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
31.01
(7)
Shipping and
offshore project
syndication
Clarksons Project
Finance Shipping AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
50.01 Shipping and
offshore project
syndication
Clarksons Property
Management AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
24.81
(8)
Provision of
property-related
services
Clarksons Property UK
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Property holding
company
Clarksons Real Estate
Investment
Management AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
50.01 Management of
companies and
funds that invest in
private companies
investing in real
estate and
associated
businesses
Clarksons Securities
AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
100 Equity and
fixed-income
sales and trading,
research and
corporate finance
services, including
equity and debt
capital markets
and M&A
transactions
Clarksons Securities
Canada Inc.
Canada 44 Chipman Hill, Suite 1000, Saint
John NB E2L 2A9, Canada
100 Equity and
fixed-income
sales and trading,
research and
corporate finance
services, including
equity and debt
capital markets
and M&A
transactions
(5) Membership interest.
(6) Has branches in Singapore, Switzerland and the United Arab Emirates.
(7) The Group holds >50% of the company’s voting rights.
(8) Although the holding represents <50%, the Parent Company controls the entity with controlling interests in subsidiary companies.
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215Clarkson PLC
2023 Annual Report
W Subsidiaries continued
Company name
Country of
incorporation Registered office address
Proportion
of shares
held directly
by the Parent
Company (%)
Proportion
of shares
held by the
Group or its
nominees (%) Principal activity
Clarksons Securities
Inc.
United
States
1230 6th Avenue, #1603, New York NY
10022, United States
100 Equity and fixed
income sales and
trading, research
and corporate
finance services,
including equity
and debt capital
markets and M&A
transactions
Clarksons Shipbroking
(Shanghai) Co., Limited
China Room 111 Building 3 No.170, Huo Shan
Road, Hongkou District, Shanghai,
200082, China
100 Shipbroking
Clarksons Shipping
Services USA LLC
United
States
211 East 7th Street, Suite 620, Austin
TX 78701, United States
100
(9)
Shipbroking
Clarksons Singapore
Pte. Limited
Singapore 1 Harbourfront Avenue, #14-07, Keppel
Bay Tower, 098632, Singapore
100 Shipbroking
Clarksons South Africa
(Pty) Ltd
South Africa 23 Halifax Street, Bryanston,
Johannesburg, 2191, South Africa
100 Shipbroking
Clarksons Structured
Asset Finance Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Provision of advice
on finance
structuring for
shipping-related
projects
Clarksons Sweden AB Sweden Dragarbrunnsgatan 55, 753 20,
Uppsala, Sweden
100 Shipbroking
Clarksons Switzerland
SA
Switzerland Rue du Prince 9, 1204, Genève,
Switzerland
100 Shipbroking
Clarksons USA Inc. United
States
251 Little Falls Drive, Wilmington, New
Castle County DE 19808, United
States
100 Holding company
Coastal Shipping
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
CPPF Eiendom AS Norway Munkedamsveien 62C, Oslo, 0270,
Norway
100 Holding company
Enship Limited United
Kingdom
Tern Place, Denmore Road, Bridge of
Don, Aberdeen, Scotland, AB23 8JX,
United Kingdom
100 Dormant
Genchem Holdings
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Holding company
Gibb Group
(Netherlands) B.V.
Netherlands Scheepmakersweg 5, 1786PD, Den
Helder, Netherlands
100 Supply of MRO,
PPE and safety
equipment for the
energy and
industrial sector
Gibb Group LLC United
States
Universal Registered Agents, Inc., 300
Creek View Road, Suite 209, Newark
19711, United States
60
(10)
Dormant
Gibb Group Ltd United
Kingdom
Tern Place, Denmore Road, Bridge of
Don, Aberdeen, Scotland, AB23 8JX,
United Kingdom
100 Supply of MRO,
PPE and safety
equipment for the
energy and
industrial sector
(9) Membership interest.
(10) Membership interest.
Notes to the Parent Company financial statements continued
216 Clarkson PLC
2023 Annual Report
W Subsidiaries continued
Company name
Country of
incorporation Registered office address
Proportion
of shares
held directly
by the Parent
Company (%)
Proportion
of shares
held by the
Group or its
nominees (%) Principal activity
H. Clarkson &
Company Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Shipbroking
Halcyon Shipping
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
J.O. Plowright & Co.
(Holdings) Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
LevelSeas Limited United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
LNG Shipping
Solutions Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Shipbroking
Manfin Consult AS Norway Munkedamsveien 62C, Oslo, 0270,
Norway
50.1 Shipping and
offshore project
syndication
Marinet (Ship
Agencies) Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Maritech Development
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Development of
digital products for
the shipping
industry
Maritech Holdings
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Holding company
Maritech Limited United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Support of digital
products and
services for the
shipping industry
Maritech Services
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Sale of digital
products and
services to the
shipping industry
Michael F. Ewings
(Shipping) Limited
United
Kingdom
27-45 Lincoln Building Ground Floor,
Great Victoria Street, Belfast, Northern
Ireland, BT2 7SL, United Kingdom
100 Dormant
Norwegian Marine
Services AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
50.01 Shipping and
offshore project
syndication
PPE Suppliers Limited United
Kingdom
Brooklyn House, Gapton Hall Road,
Great Yarmouth, Norfolk, NR31 0RD,
United Kingdom
100 Dormant
Recap Manager
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Sale of digital
products and
services to the
tanker shipping
industry
RS Platou AS Norway Munkedamsveien 62C, Oslo, 0270,
Norway
100 Dormant
RS Platou Economic
Research AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
100 Dormant
RS Platou Hellas
Limited
Cyprus Arch. Makarios III, 58, Iris Tower, Floor
8, Nicosia, 1075, Cyprus
100 Non-trading
RS Platou Offshore AS Norway Munkedamsveien 62C, Oslo, 0270,
Norway
100 Dormant
RS Platou Shipbrokers
AS
Norway Munkedamsveien 62C, Oslo, 0270,
Norway
100 Dormant
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217Clarkson PLC
2023 Annual Report
W Subsidiaries continued
Company name
Country of
incorporation Registered office address
Proportion
of shares
held directly
by the Parent
Company (%)
Proportion
of shares
held by the
Group or its
nominees (%) Principal activity
Seafix Limited United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Sale of digital
products and
services to the
shipping industry
Sea by Maritech
Singapore Pte. Ltd.
Singapore 8 Cross Street #21-05, Manulife Tower,
Singapore, 048424
100 Marketing, sales
and support of
online contract
management
platform
Sea by Maritech
Sweden AB
Sweden Vasagatan 28, 111 20, Stockholm,
Sweden
100 Sale and support
of digital products
and services for
the shipping
industry
Setapp Spółka Z
Ograniczoną
Odpowiedzialnością
Poland ul. Wojskowa 6, 60-792, Poznań,
Poland
100 Support of digital
products and
services for the
shipping industry
Shipvalue.net Limited United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Small & Co. (Shipping)
Limited
United
Kingdom
Commodity Quay, St Katharine Docks,
London, E1W 1BF, United Kingdom
100 Dormant
Stewart Offshore
Services (Jersey)
Limited
(11)
Jersey 1 Waverley Place, Union Street, St.
Helier, JE4 8SG, Jersey
100 Non-trading
VAXA Drift AS Norway c/o Vaxa Property AS, Philip
Pedersens vei 20, Lysaker, 1366,
Norway
8.62
(12)
Operation cost
management for
property SPV
VAXA Group AS Norway c/o Vaxa Property AS, Philip
Pedersens vei 20, Lysaker, 1366,
Norway
8.62
(12)
Holding company
VAXA Økonomi AS Norway Philip Pedersens vei 20, Lysaker, 1366,
Norway
4.32
(12)
Provision of
accounting and
financial advisory
VAXA Property AS Norway Philip Pedersens vei 20, Lysaker, 1366,
Norway
8.62
(12)
Property
management
services
Waterfront Services
Limited
United
Kingdom
27-45 Lincoln Building Ground Floor,
Great Victoria Street, Belfast, Northern
Ireland, BT2 7SL, United Kingdom
100 Dormant
(11) Dissolved on 9 February 2024.
(12) Although the holding represents <50%, the Parent Company controls the entity with controlling interests in subsidiary companies.
Notes to the Parent Company financial statements continued
218 Clarkson PLC
2023 Annual Report
W Subsidiaries continued
The Directors believe that alternative performance measures can provide users of the financial statements with a better
understanding of the Group’s underlying financial performance, if used properly. Directors’ judgement is required as to what
items qualify for this classification.
Adjusting items
The Group excludes adjusting items from its underlying earnings metrics with the aim of removing the impact of one-offs
which may distort period-on-period comparisons.
The term ‘underlying’ excludes the impact of exceptional items and acquisition-related costs, which are shown separately on
the face of the income statement. Management separates these items due to their nature and size and believes this provides
further useful information, in addition to statutory measures, to assist readers of the Annual Report to understand the results
for the year.
Underlying profit before taxation
Reconciliation of reported profit before taxation to underlying profit before taxation for the year.
2023
£m
2022
£m
Reported profit before taxation 108.8 100.1
Less exceptional items (2.2) –
Add back acquisition-related costs 2.6 0.8
Underlying profit before taxation 109.2 100.9
Underlying effective tax rate
Reconciliation of reported effective tax rate to underlying effective tax rate.
2023
%
2022
%
Reported effective tax rate 21.1 20.5
Adjustment relating to exceptional items 0.7 –
Adjustment relating to acquisition-related costs (0.4) (0.1)
Underlying effective tax rate 21.4 20.4
Underlying profit for the year attributable to equity holders of the Parent Company
Reconciliation of reported profit attributable to equity holders of the Parent Company to underlying profit attributable to
equity holders of the Parent Company.
2023
£m
2022
£m
Reported profit attributable to equity holders of the Parent Company 83.8 75.6
Less exceptional items (2.5) –
Add back acquisition-related costs 2.5 0.7
Underlying profit attributable to equity holders of the Parent Company 83.8 76.3
Underlying basic earnings per share
Reconciliation of reported basic earnings per share to underlying basic earnings per share.
2023
Pence
2022
Pence
Reported basic earnings per share 275.2 247.9
Less exceptional items (8.4) –
Add back acquisition-related costs 8.2 2.4
Underlying basic earnings per share 275.0 250.3
Underlying administrative expenses
Reconciliation of reported administrative expenses to underlying administrative expenses for the year.
2023
£m
2022
£m
Reported administrative expenses 509.2 482.0
Add back exceptional items 2.2 –
Less acquisition-related costs (2.6) (0.8)
Underlying administrative expenses 508.8 481.2
Alternative performance measures
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
219Clarkson PLC
2023 Annual Report
Operational metrics
The Group monitors its cash and liquidity position by adjusting gross balances to reflect the payment of obligations to staff
and restricted monies held by regulated entities.
Net cash and available funds
The Board uses net cash and available funds as a better representation of the net cash available to the business, since
bonuses are typically paid after the year-end, hence an element of the year-end cash balance is earmarked for this purpose.
It should be noted that accrued bonuses include amounts relating to the current year and amounts held back from previous
years which will be payable in the future.
Reconciliation of reported cash and cash equivalents to net cash and available funds reported.
2023
£m
2022
£m
Cash and cash equivalents as reported 398.9 384.4
Add cash on deposit and government bonds included within current investments 39.9 3.1
Less amounts reserved for bonuses included within current trade and other payables (237.7) (225.8)
Net cash and available funds 201.1 161.7
Free cash resources
Free cash resources is a further measure used by the Board in taking decisions over capital allocation. It deducts monies
held by regulated entities from the net cash and available funds figure.
Reconciliation of reported cash and cash equivalents to reported free cash resources.
2023
£m
2022
£m
Cash and cash equivalents as reported 398.9 384.4
Add cash on deposit and government bonds included within current investments 39.9 3.1
Less amounts reserved for bonuses included within current trade and other payables (237.7) (225.8)
Less net cash and available funds held in regulated entities (25.7) (30.8)
Free cash resources 175.4 130.9
Alternative performance measures continued
220 Clarkson PLC
2023 Annual Report
Aframax A tanker size range defined by Clarksons
as between 85,000-124,999 dwt.
AI Artificial Intelligence.
API Application Programming Interface.
A data delivery mechanism.
Board The Board of Directors of Clarkson PLC.
Bulk cargo Unpackaged cargoes such as coal,
ore and grain.
Bunkers A ship’s fuel.
Capesize
(cape)
Bulk ship size range defined by
Clarksons as 100,000 dwt or larger.
Cbm Cubic metres. Used as a measurement
of cargo capacity for ships such as
gas carriers.
CEO Chief Executive Officer, Andi Case.
CFO & COO Chief Financial Officer & Chief Operating
Officer, Jeff Woyda.
Cgt Compensated gross tonnage. This unit
of measurement was developed for
measuring the level of shipbuilding output
and is calculated by applying a conversion
factor, which reflects the amount of work
required to build a ship, to a vessel’s gross
registered tonnage.
CII Carbon Intensity Indicator. An IMO vessel
operational efficiency measure which came
into force from 2023.
Chair Laurence Hollingworth.
Charterer Cargo owner or another person/company
that hires a ship.
Charter party Transport contract between shipowner
and shipper of goods.
Chinsay Maritech Holdings Limited (a wholly owned
Group subsidiary) acquired Chinsay AB
on 3 October 2022. On 16 February 2023,
Chinsay AB changed its name to Sea by
Maritech Sweden AB.
CGU Cash-Generating Unit. An accounting
concept used by the International Financial
Reporting Standards to determine asset
impairment.
Clean
products
Oil products derived from refining crude
oil, including gasoline, naphtha, kerosene
and diesel. Excludes ‘heavier’ oil products
such as fuel oil which are categorised as
‘dirty products’
CoA Contract of Affreightment. A freight
agreement between a ship owner/operator
and a cargo interest/charterer to move a
defined amount of cargo on pre-defined
routes over a period of time, for a
pre-agreed rate.
Code The UK Corporate Governance Code
(July 2018).
Company Clarkson PLC as a standalone entity,
registered in England and Wales under
company number 1190238.
Containership A cargo ship specifically equipped
with cell guides for the carriage
of containerised cargo.
COVID-19 A global pandemic caused by
the SARS-CoV-2 virus, first identified
in late 2019.
CO
2
Carbon dioxide.
CPP Clean Petroleum Products. Refined oil
products including gasoline, gas oil, jet fuel,
kerosene and naptha.
CPS Clarkson Port Services, a business within
Clarksons’ Support division.
CPS BV A subsidiary company formerly named
DHSS, acquired by the Group in 2023.
Crude oil Unrefined oil.
CSOV Construction Service Operation Vessels.
Vessels designed for wind farm support
operations, providing accommodation,
workshops and equipment enabling
access to offshore wind installations.
CSR Corporate Social Responsibility.
DEI Diversity, equity and inclusion.
Disclosure
Guidance and
Transparency
Rules
Regulations which apply to most larger
companies on the London Stock Exchange,
which implement a number of EU
Directives on transparency, market abuse,
accounting and audit. The Disclosure
Guidance and Transparency Rules are
supplementary to the Listing Rules.
DHSS A group of companies (DHSS Aviation B.V.,
DHSS Logistics B.V., DHSS Projects B.V.
and DHSS Service B.V.) acquired by the
Group on 6 February 2023. DHSS was
subsequently reorganised and renamed
Clarkson Port Services B.V.
Dry (market) Generic term for the bulk market.
Dry cargo
carrier
A ship carrying general cargoes
or sometimes bulk cargo.
Dwt Deadweight tonne. A measure expressed
in metric tonnes (1,000 kg) or long tonnes
(1,016 kg) of a ship’s carrying capacity,
including cargo, bunkers, fresh water,
crew and provisions.
EBT Employee Benefit Trust. A trust established
by the Company for the purpose of
facilitating the operation of the Company’s
share plans.
ECM Equity Capital Markets.
E&P Exploration and Production.
EPC Engineering, procurement
and construction.
EPS Earnings per share.
ESEF The European Single Electronic Format.
The electronic reporting format in which
issuers on EU regulated markets must
prepare their annual financial reports.
ESTs Energy Saving Technologies.
ESG Environmental, Social and Governance.
Glossary
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
221Clarkson PLC
2023 Annual Report
Glossary continued
ETS The EU Emissions Trading System.
A greenhouse gas emissions trading
system extended to shipping from
the start of 2024.
Executive
Directors
Andi Case (CEO) and Jeff Woyda
(CFO & COO).
External audit An independent opinion of the Group
and Company’s financial statements by an
external firm. PricewaterhouseCoopers LLP
is the Group’s current External Auditor.
Fair value Fair value is defined as an amount at which
an asset could be exchanged between
knowledgeable and willing parties in
an arm’s-length transaction.
FFA Forward Freight Agreement. A cash
contract for differences requiring no
physical delivery based on freight rates
on standardised trade routes and for
standardised vessel types.
FID Refers to the Financial Investment Decision
for an investment project.
Financial
Conduct
Authority
(‘FCA’)
The FCA regulates the financial services
industry in the UK.
Financial
Reporting
Council (‘FRC’)
The FRC regulates auditors, accountants
and actuaries, and sets the UK’s Corporate
Governance and Stewardship Codes.
FOB Forward order book. Estimated
commissions collectable over the duration
of the contract as principal payments
fall due. The forward order book is
not discounted.
Freight rate The agreed charge for the carriage
of cargo expressed per tonne of cargo
(also Worldscale in the tanker market),
or as a lump sum.
FTSE 250 The share index consisting of the 101st
to 350th largest companies listed on the
London Stock Exchange main market.
Clarkson PLC has been a member
of the FTSE 250 since 2015.
FVOCI Fair value through other comprehensive
income. A classification category for
financial assets under IFRS 9.
FVPL Fair value through profit or loss.
Aclassification category for financial
assets under IFRS 9.
GHG Greenhouse gas.
Group Clarkson PLC and its subsidiary
undertakings.
GT Gross Tonnage. A standardised measure
of a ship’s internal volume as defined
by the IMO.
GW Gigawatts. A unit of power or power
capacity equivalent to 1 billion watts.
IFRS International Financial Reporting
Standards. A set of international
accounting standards stating how
particular types of transactions and
other events should be reported in
financial statements.
IEA International Energy Agency. An agency
which works with countries around the
world to shape energy policies.
IMO International Maritime Organization.
AUnited Nations agency devoted
to shipping.
KPIs Key performance indicators.
LCO
2
Liquefied Carbon Dioxide (CO
2
).
The liquid form of carbon dioxide, formed
via pressurisation (and often refrigeration)
of gaseous carbon dioxide. LCO
2
carriers
are vessels designed to carry such cargoes.
LGC Large Gas Carrier. Vessel defined
by Clarksons as 45,000-64,999 cbm.
Listing Rules Set of regulations overseen by the
Financial Conduct Authority, which apply
to any company listed on the London
Stock Exchange.
Liquidity risk The risk of the Group being unable to meet
its cash and collateral obligations without
incurring large losses.
LNG Liquefied Natural Gas.
LPG Liquefied Petroleum Gas.
LR1 Long Range 1. Coated products tanker,
defined by Clarksons as 55,000-84,999 dwt.
LR2 Long Range 2. Coated products tanker,
defined by Clarksons as 85,000-124,999 dwt.
LSE London Stock Exchange. The stock
exchange in the City of London on which
Clarkson PLC’s shares are listed.
M&A Mergers and Acquisitions.
MPP Multi Purpose. A diverse fleet of vessels
which are typically capable of carrying
both containerised and bulk cargoes; many
also have ‘heavy lift’ capability in order to
transport large project cargoes.
MR Medium Range. A product tanker of around
45,000-55,000 dwt.
MRO Maintenance, repair and operating products,
which includes consumables, industrial
equipment and plant upkeep supplies.
MT Metric tonne (see tonne). A measure
equivalent to 1,000 kg.
222 Clarkson PLC
2023 Annual Report
Non-Executive
Director
A Director of the Board, not part of the
executive management of the Company,
who is free from any business or other
relationship that could materially
conflict with their ability to exercise
independent judgement.
O&M Operations & Maintenance.
OPEC Organization of the Petroleum
Exporting Countries.
OSV Offshore Support Vessels. Includes
Anchor Handling Tug Supplys (‘AHTSs’)
and Platform Supply Vessels (‘PSVs’).
Ships engaged in providing support
to offshore rigs and oil platforms.
Parent
Company
Clarkson PLC as a standalone entity,
registered in England and Wales under
company number 1190238.
PCG PetroChemical Gas.
PPE Personal protective equipment.
Products
tanker
Tanker that carries refined oil products.
ROV Remotely Operated Vehicle.
S&P Sale and Purchase, a business within
Clarksons’ Broking division
SaaS Software as a Service.
SAPS Self-administered pension scheme.
Used in this Annual Report in the context
of mortality tables published by the UK’s
Continuous Mortality Investigation.
SBP Share-based payments.
SCFI Shanghai Containerised Freight Index. An
index produced by the Shanghai Shipping
Exchange reflecting movements in spot
container freight rates from Shanghai to a
selection of destinations around the world.
SECR Streamlined Energy and Carbon Reporting.
Mandatory reporting for large businesses
in the UK regarding their energy and
carbon emissions.
Setapp Maritech Holdings Limited (a wholly owned
Group subsidiary) acquired Setapp Spółka
Z Ograniczoną Odpowiedzialnością on
4 November 2022.
SID Senior Independent Director, Sue Harris.
Shipbroker A person/company that, on behalf of a
shipowner/shipper, negotiates a deal for the
transportation of cargo at an agreed price.
Shipbrokers also act on behalf of shipping
companies in negotiating the purchasing
and selling of ships, both secondhand
tonnage and newbuilding contracts.
Spot market Short-term contracts for voyage, trip
or short-term time charters, normally
no longer than three months in duration.
Suezmax A tanker size range defined by Clarksons
as 125,000-199,999 dwt.
TCFD Task Force on Climate-Related Financial
Disclosures. A framework which provides
consistency in reporting of climate-related
financial information.
TEU 20-foot Equivalent Units. The unit
of measurement of a standard 20-foot
long container.
TEU-miles TEU trade volumes moved, multiplied
by distance travelled in miles; used in order
to give a better estimate of vessel demand
on given trade route(s).
TCE Time Charter Equivalent. Gross freight
income less voyage costs (bunker, port
and canal charges), usually expressed
in US dollar per day.
TFDE Tri Fuel Diesel Electric. A propulsion system
used mainly in LNG carriers, where the
vessel is capable of using both boil-off
gas and conventional fuels to generate
electricity in order to power electric motors
which drive the ship’s propellers.
Time charter An arrangement whereby a shipowner
places a crewed ship at a charterer’s
disposal for a certain period. Freight is
customarily paid periodically in advance.
The charterer also pays for bunker, port
and canal charges.
Tonne Metric tonne of 1,000 kg or 2,204 lbs.
TSR Total Shareholder Return.
VLAC Very Large Ammonia Carrier. A VLGC
optimised for the carriage of ammonia
cargoes as well as LPG.
VLCC Very Large Crude Carrier. Tanker
over 200,000 dwt.
VLGC Very Large Gas Carrier. Vessel defined
by Clarksons as 65,000 cbm or larger.
Wet (market) Generic term for the tanker market.
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
223Clarkson PLC
2023 Annual Report
Income statement
2023*
£m
2022*
£m
2021*
£m
2020*
£m
2019*
£m
Revenue 639.4 603.8 443.3 358.2 363.0
Cost of sales (30.4) (21.8) (16.5) (13.3) (14.3)
Trading profit 609.0 582.0 426.8 344.9 348.7
Administrative expenses (508.8) (4 81 . 2) (355.7) (298.5) (298.2)
Operating profit 100.2 100.8 71.1 46.4 50.5
Profit before taxation 109.2 100.9 69.4 44.7 49.3
Taxation (23.4) (20.6) (14.7) (9.5) (11.4)
Profit for the year 85.8 80.3 54.7 35.2 37. 9
* Before exceptional items and acquisition-related costs.
Cash flow
2023
£m
2022
£m
Restated 2021
£m
2020
£m
2019
£m
Net cash inflow from operating activities 155.3 178.9 125.1 65.9 67. 8
Balance sheet
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
Non-current assets 284.6 288.9 290.3 290.1 349.9
Inventories 3.3 2.4 1.5 1.3 1.1
Trade and other receivables
(including income tax receivable) 148.7 153.1 118.4 76.8 77.1
Current asset investments 40.1 3.5 10.3 31.1 15.6
Cash and cash equivalents 398.9 384.4 261.6 173.4 175.7
Current liabilities (371.3) (366.2) (257.3) (177.4) (170.6)
Non-current liabilities (47.7) (52.9) (63.2) (66.9) (68.2)
Net assets 456.6 413.2 361.6 328.4 380.6
Statistics
2023
Pence
2022
Pence
2021
Pence
2020
Pence
2019
Pence
Earnings per share – basic* 275.0 250.3 165.6 106.0 118.8
Dividend per share 102.0 93.0 84.0 79.0 78.0
* Before exceptional items and acquisition-related costs.
Changes to IFRS have not been retrospectively adjusted.
Five-year financial summary
224 Clarkson PLC
2023 Annual Report
Overview
Corporate
Governance
Financial
statements
Strategic
Report
Other
information
225Clarkson PLC
2023 Annual Report
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