Shares in scaffolder and painter Cape (CIU) jumped 13 per cent as the company came clean on bad investments. Following an extensive balance sheet clean-up operation, Joe Oatley, chief executive, now believes the company is on a solid, cash-generative footing and exposed to continued investment in the oil and gas sector. He underlined his confidence by holding the 14p full-year dividend.
Cape's reported results were hit by £150.4m in exceptional costs mainly related to assets in Australia built up during an overambitious expansion strategy, there was also a further £5.8m on the Arzew project in Algeria bringing total charges there to £19.8m. Adjust for this, and underlying pre-tax profits plummeted 66 per cent to £23.8m as margins fell across the Middle East, Far East and Pacific Rim, and Commonwealth of Independent States, Mediterranean and North African markets. Mr Oatley unveiled a new company structure based around three geographic regions.
The outlook has weakened, too, with the forward order book down £128m on the prior period to £725m. Broker Numis Securities downgraded adjusted EPS forecasts by 7 per cent to 26.4p on lower Middle East margins and the completion of a major project in Kashagan, although this still represents a recovery of 62 per cent on 2012's 16.3p.
CAPE (CIU) | ||||
---|---|---|---|---|
ORD PRICE: | 262p | MARKET VALUE: | £317m | |
TOUCH: | 261-263p | 12-MONTH HIGH: | 480p | LOW: 163p |
DIVIDEND YIELD: | 5.3% | PE RATIO: | na | |
NET ASSET VALUE: | 144p* | NET DEBT: | 37% |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2008 | 623 | 37.8 | 26.9 | nil |
2009 | 655 | -15.6 | -3.5 | nil |
2010 | 650 | 63.1 | 42.6 | 12.0 |
2011 | 698 | 61.9 | 40.2 | 14.0 |
2012 | 740 | -140 | -167 | 14.0 |
% change | +6 | - | - | - |
Ex-div: 8 May Payment: 7 Jun *Includes intangible assets of £117m, or 97p a share |