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Cape cuts costs and builds profits

RESULTS: Energy services provider Cape increased its operating profits substantially in 2013, as the benefits of a severe divestment and re-structuring regime kicked in.
March 19, 2014

Cape (CIU) swung back into the black in 2013. The previous year's headline loss of £143m was brought about by £150m in exceptional items, linked to a divestment and re-structuring programme that reduced group overheads by more than 50 per cent. By contrast, Cape booked a relatively modest charge of £15.5m in 2013, as the energy services provider restructured its operations in Australia. A better gauge of the group's progress may be the 47 per cent increase in its operating profits, before exceptional items, to £25m.

IC TIP: Hold at 309p

That came despite falling sales. Cape's top line suffered from the completion of a number of major projects in the first half, including the SPT project in Singapore, as well as from deteriorating market conditions in Kazakhstan and the Asia Pacific. Matters weren't helped by delayed receipts from both the oil and gas and mining industries, as companies took time out to re-assess their forward capital commitments.

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