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Falkland Islands looks to the future

RESULTS: Support services group Falkland Islands boasts plenty of potential as oil exploration efforts around the islands pick up momentum - but, right now, trading looks subdued

Full-year figures from support services group Falkland Islands Holdings (FKL) saw underlying pre-tax profit rise 1.9 per cent to £3.29m - helped by a robust performance at its Momart art logistics business. But sentiment is likely to be influenced by the success of Falkland Oil & Gas' (FOGL) drilling efforts - Falkland Islands holds a 4 per cent stake in FOGL.

IC TIP: Hold at 333p

Unfortunately, FOGL hasn't had the best of luck after an exploration well came up dry last November. But, more generally, exploration potential should deliver a boom for the islands. A Falkland Islands Government report, for example, believes the economy could grow sevenfold over the next five years once the Sea Lion field, owned by Rockhopper, is developed - to commence in mid-2014. That's good news for the group's Falkland Islands Company unit, which offers services ranging from retailing to property. Although, in the period, fewer cruise ships visits and less dock work meant profit here fell 12.5 per cent to £1.33m. Moreover, fare increases meant 8.9 per cent fewer passengers at the Portsmouth Harbour Ferry operation and profits there dropped 10 per cent to £0.98m. Still, more exhibitions and a strong art market helped Momart's profit rise 24 per cent to £1.19m.

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