Cape (CIU) maintained its dividend at the first-half results, a move that demonstrates the management team's confidence in the outlook. However, the market didn't share that confidence and shares in the industrial painting and scaffolding company were marked down 7 per cent post results. The reported first-half numbers were hit by an exceptional charge of £15.6m relating to a performance improvement programme in Australia, a region that remains challenging as the slowdown in mining bites.
Weakness in the Australian and Asian markets, along with a hit from the timing of contract renewals in the UK, caused order intake to drop by more than a third in the first half, which prompted analysts at WH Ireland to cut their 2014 EPS forecast by 12 per cent to 29.9p. However, the broker is maintaining its 2013 forecast of 27.1p, up from 16.2p in 2012.
Cracks starting appearing in the business last year as a group-wide review of the value of Cape's assets led to some unwelcome discoveries and a series of profit warnings. Joe Oatley, who joined as chief executive in June 2012, hopes that there will be no further nasty surprises: "We are pretty confident that the big things are out there." He says that the focus is now on steadying the ship and getting the right management controls in place.
| CAPE (CIU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 262p | MARKET VALUE: | £317m | |
| TOUCH: | 261p-263p | 12-MONTH HIGH: | 330p | LOW: 168p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | NA | |
| NET ASSET VALUE: | 138p* | NET DEBT: | 43% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 360 | 9.7 | 4.80 | 4.5 |
| 2013 | 371 | 4.2 | 1.20 | 4.5 |
| % change | +3 | - | - | - |
Ex-div: 11 Sep Payment: 11 Oct *Includes intangible assets of £116m, or 96p a share | ||||
