Investment summary

Interim results were not helped by weak shipping rates and a fluctuating US dollar, while the defection of key members of the sale and purchase team led to a substantial goodwill write-off. However, the underlying business remains very sound, with an enviable position in the market place and a strong balance sheet. Diversification into the dry cargo market continues largely to plan. Recovery will be slow while shipping over-capacity persists, meanwhile the shares look distinctly undervalued and offer a safe high yield.

Last updated on 09/12/2011

Industry outlook

The shift in global manufacturing capacity towards lower-cost areas has irreversibly enhanced the underlying potential for shipping, although the recession has created weakness in freight rates, at a time of excess shipping capacity. The major shipbrokers are better equipped to provide advice to customers. A combination of being at, or close to, the bottom of the cycle and the cash-generative nature of the businesses suggests strong medium-term buying opportunities across the sector.

Last updated on 09/12/2011