Forth Ports sounds the retreat

The impact of the recession on world trade was always going to impact Forth's port business and the first half proved to be tough, with revenues from ports dipping by 4 per cent from £89.4m to £85.8m and profits falling from £22.7m to £19.5m. This was creditable given that utility bills and wage costs rose significantly during the period, partly offset by efficiency savings. Port operations at Tilbury were mainly affected by a 21 per cent fall in containers shipped through the facility - 140,900 versus 179,300 boxes in 2008. On the plus side, grain imports were up by an impressive 60 per cent, although this could be down to speculation, as buyers take advantage of falling grain prices to build up stockpiles. The Nordic division was hit by a fall in demand for paper and recycled products, although this has picked up in the last three months. The construction slump hit the Scottish ports particularly badly, with Rosyth and Grangemouth worst affected - total tonnage handled was down by 500,000 tonnes to 5.5m tonnes.

But Forth's true Achilles heel has been its property business, as land values have slumped. Management hopes that the planning application and masterplan for Leith docks, submitted to the council at Christmas, will be considered by the planning authorities later this year. Conditions in the commercial property market are still tough, but no more write-downs have been booked against the land bank. The value of the ocean terminal development was reduced to £81.75m, resulting in the £2.4m charge on the income statement. Costs have been cut in the property division to reflect the straitened times. Chief executive Charles Hammond said the state of the property portfolio reflects the market: "There is no sense in selling, so we'll wait for when the recovery comes," he said.

Analyst John Lawson of Investec is forecasting full-year adjusted EPS of 54.4p, valuing the company at 23 times earnings.