Cape (CIU) announced weak half-year results in line with expectations, with pre-exceptional operating profits down 12 per cent on the 2013 interim to £23.4m. Revenue comparisons were unfavourable, due to the completion of a number of large construction projects during the first six months of last year. Currency translations were also an issue, with the strength of sterling knocking around 6 per cent off the top line.
There were mixed returns across Cape’s businesses, with strong demand in the Middle East and North Africa set against subdued activity in construction markets. Overall, Cape managed to drive up order intake by a third to £317m - although this was partly thanks to the March deal to acquire engineering contractor Motherwell Bridge for £38m.
Second-half figures stand to benefit from a ramp-up at the Wheatstone LNG project in Western Australia, which is operated by Chevron. The project had minimal impact on these first-half results, but activity has now begun to pick up. The second half will also reflect a full six-month contribution from Motherwell Bridge, as well as a big power maintenance contract awarded to Cape Hong Kong Fuji in April. Management anticipates an improvement in UK margins, too.
UBS predicts 2014 EPS of 27.6p, rising to 30.9p next year.
| CAPE (CIU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 305p | MARKET VALUE: | £369m | |
| TOUCH: | 300-305p | 12-MONTH HIGH: | 335p | LOW: 226p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 71 | |
| NET ASSET VALUE: | 105p* | NET DEBT: | 101% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 (restated) | 371 | 6.1 | 4.5 | 4.5 |
| 2014 | 322 | 17.1 | 10.8 | 4.5 |
| % change | -13 | +180 | +140 | - |
Ex-div:10 Sep Payment:10 Oct *Includes intangible assets of £156m, or 129p a share | ||||
