Round-the-world yachting race organiser Clipper Ventures has encountered choppy financial waters over the past few years. However, calmer seas are in sight with £12m revenue booked for the next two years. The latest race is currently in progress, with ten yachts circling the globe and bringing in £3.5m of sponsorship monies and £5m of crew fees. Clipper plans to realise the total income over more than the year in which the race will take place. Thus in the current year to next April turnover will jump from £582,000 to £5.68m. The previous year’s low level reflected the fact that the previous round-the-world race did not take place as scheduled. This dented many investors’ faith in the venture and the shares plunged.

At the current level, the group is worth just £6.3m, and based on forecast profits of £2.1m, or 4.6p earnings per share, the shares have a forward p/e of just 5.2. Critics might point out that future revenues are by no means assured. However, proven entrepreneur William Ward points out that, as well as adopting a shrewd and conservative accounting policy to recognise revenues, the company is already securing income for future events. These include a solo circumnavigation race to be held in 2006 and the next Clipper trip, which will start in 2007. Further reassurance can be had from the fact that the group’s boats could be sold for £8.2m – more than the group’s current valuation.