Cape benefits from overhaul

Cape said its full-year profits were on course to beat expectations and that it planned to return to the main board of the London Stock Exchange in the second quarter of 2009.

The former asbestos producer, which was weighed down by injury compensation claims from thousands of workers in South Africa and the UK, now focuses on support services for the energy and natural resources sectors.

Announcing pre-tax profits that rose 9.7 per cent to £14.7m (£13.4m) in the six months to June 30, on turnover up 58 per cent at £296m (£187.4m), Cape said it would beat full-year forecasts for pre-tax profits of about £43.3m.

Steve Woolf, an analyst at Kaupthing Bank, said Cape’s earnings visibility was good and its order book strong.

Two-thirds of revenue now comes from the buoyant energy sector and petrochemicals, with other resources activities accounting for 12 per cent. Strong oil prices have protected the spending power of Cape’s energy customers and demand for oil and gas has extended the lifetime of North Sea assets.

A reorganisation last year created divisions based on Cape’s geographical foci. The Middle East was the biggest contributor to operating profits in the first half of this year, closely followed by the UK, with the CIS/Caspian, and the Pacific Rim some way behind.

Earnings per share rose 11.7 per cent to 11.5p (10.3p).

The shares slipped 3¾p to 228¼p but have benefited from settlement and ring fencing of asbestos-related claims that helped it rebuild from a nadir of 9p reached in September 2002.

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