CEO's review 2024

The fundamental supply and demand dynamics of the industry remained in fine balance during the year, with underlying trade volume growth and disruptions to trade patterns increasing demand, while the supply side remained challenged by low orderbooks in certain sectors and a tight shipbuilding market. Seaborne trade grew by 2.4% in 2024, driven by global economic consumption and rising energy and resource requirements.

Conversely, despite a 13% increase in global shipyard output in the year, the global fleet grew steadily at 3.4%, weighted towards the containers and LNG sectors. Prices for newbuild vessels remained high, reaching peak 2008 levels, following inflationary pressures at shipyards, firm forward cover and strong ordering volume.

Ongoing conflicts in the Middle East and Russia-Ukraine continued to underscore the importance and fragility of global supply chains. An increasingly complex and evolving sanctions environment added to challenges for shipowners and charterers alike with some 1,300 ships in the global fleet now sanctioned. These events led to significant shifts in the global flows of energy and resources and the largest increase in tonne miles in the sector for 15 years. Our position at the forefront of the industry, bolstered by our global and regional expertise and deep market intelligence, has enabled us to support our clients in managing these complexities effectively.

The green transition remains a significant underlying trend as the industry moves towards alternative fuels and more efficient technology, and embarks on an unprecedented fleet renewal programme to meet 2030 and 2050 emissions targets. Half of orders by tonnage in 2024 involved alternative fuel and 7% of the global fleet is now fitted with green or alternative fuel technology, a number which is forecast to rise to 20% by 2030. Retrofitting has also been a key theme, with 34% of the fleet now equipped with energy-saving technology. Our Green Transition and Research teams continue to provide clients with the support, data and intelligence they need as they respond to the opportunities and challenges the move towards decarbonisation provides.

The Broking division had a very strong year, supported by an active sale and purchase market across newbuilding and secondhand transactions, and generally robust conditions across all other sectors. The forward order book (‘FOB’) continues to grow, both for invoicing in 2025 and further out over the coming years. This FOB gives us good visibility of baseline future earnings.

Geo-political disruptions, the redistribution of energy flows and an underlying increase in Atlantic to Pacific commodity trade resulted in significantly increased tonne miles, supporting rates and activity in chartering. The offshore sector also performed well during the year, with rates reaching record levels on the back of investor sentiment following a supply-side rebalancing and incremental demand gains. 

Carbon emissions from the industry increased slightly due to the increase in tonne miles. Our Broking and Green Transition teams continue to advise clients on fleet renewal programmes and the latest green technologies to achieve longer-term environmental targets. The Broking division continued to invest in expanding its global footprint through the hiring of new people and teams both in the UK and overseas. Key hires included leaders from both competitors and principals, increasing the  scope and services we offer our clients, and extending the products we cover in both the physical and derivative markets. The truly global nature of the business is demonstrated by the fact that two-thirds of our brokers are now based outside of the UK, with representation in every major shipping geography and sector. We remain focused on being best in class in every sector of shipping, servicing clients with local expertise supported by the data, technology and insights of a truly global business.

Segmental profit before taxation from Broking was £122.6m at a margin of 23.2% (2023: £121.2m and 23.5%). 

The Financial division faced a more challenging year, with reduced investor risk appetite in certain sectors amid geo-political uncertainty. Capital markets activity was also tempered in shipping equities as companies continued to focus on debt repayments and returns to shareholders. Investor sentiment was more stable across the metals and minerals and offshore sectors.

Overall, our investment banking team supported and advised clients on executing a number of mandates across, particularly, debt capital  markets and M&A. 

Debt capital markets performed particularly well, supported by a record year of activity in the Nordic high-yield bond market.

Investor  interest in shipping project finance remained healthy, albeit real estate market activity has continued to be challenged.

The division reported a segmental profit before taxation of £5.2m in 2024 compared with £6.6m in 2023.

Our Support division had a record year despite the significant reduction in transits through the Suez Canal. The division’s increasingly diversified offering across the offshore oil and gas, marine and renewable energy sectors, and broadening client base, has enhanced performance during recent years.

The activities of Gibb Group, specialists in tools and supplies, and safety and survival products, were enhanced further by the acquisition of Trauma & Resuscitation Services Limited, now rebranded to Gibb Medical and Rescue, in early 2024. The company is a leading provider of enhanced first aid training, compliance and emergency response services and has performed beyond management’s expectations in its first year of ownership. 

The Support division produced a segmental profit before taxation of £7.7m and a 11.8% margin in 2024 (2023: £6.4m and 11.3%).

As markets become more complex and the supply of data becomes increasingly key to decision-making, our leading Research division plays a progressively more important role in offering depth of knowledge and best-in-class insights across the sector.

We continue to invest in providing market-leading intelligence which, combined with our understanding of the shipping and offshore markets and digital capabilities, is supporting over 3,500 clients globally. The division is constantly evolving its products across geo-political trends, the energy transition and fleet evolution. 2024 also saw increasing demand from clients to embed data within workflows to support real-time information and decision-making. The increasing demand from clients has resulted in recurring revenue increasing to 90%.

The division increased segmental profit before taxation by 13% to £9.5m (2023: £8.4m).

Our Sea platform continues to move forward, achieving growth in both customer base and volumes. Sea Trade 2.0 was released in the second half of the year, with all clients now successfully migrated to the new operating platform.

This more flexible technology base will enable our clients to benefit from increasingly efficient workflows and data access to manage their pre-fixture activities, and will provide the base for faster and more extensive cross-market product releases in the future.