The proposed merger of Wood Group and Amec Foster Wheeler may have consumed oil services industry chatter in recent days, but this was also a big week for junior peer Cape (CIU). Despite a weak domestic market, strong orders from Asia Pacific and Middle East clients meant full-year earnings came in ahead of market expectations. And, while revenue and cash flow were slightly flattered by £10m to £15m of fortuitously-timed payments in December, a robust order intake of £850m was buttressed by management optimism about UK orders and downstream project commissions.
Investors also have greater clarity on a hitherto worrying legal issue. On 12 March, the company reached an out-of-court settlement with insurers Aviva, RSA and Zurich, who had brought industrial disease-related insurer product liability claims against Cape. Though liabilities were potentially unlimited, Cape has now paid out £18m to resolve the issue. An additional payout of up to £34.5m will fall between 2018 and 2023, and precipitated the company's decision to re-set its dividend.
Numis expects adjusted pre-tax profits of £43.5m and EPS of 27.7p this year, up from £42.8m and 27.6p in 2016.
CAPE (CIU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 181p | MARKET VALUE: | £219m | |
| TOUCH: | 181-184p | 12-MONTH HIGH: | 244p | LOW: 139p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 91p* | NET DEBT: | 69% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 737 | -143 | -137 | 14 |
| 2013 | 675 | 0.4 | -1.5 | 14 |
| 2014 | 691 | 30.0 | 18.7 | 14 |
| 2015 | 711 | -29.1 | 15.5 | 14 |
| 2016 | 864 | -43.6 | -41.1 | 7 |
| % change | +21 | - | - | -50 |
Ex-div: 18 May Payment: 23 Jun *Includes intangible assets of £150m, or 124p a share. | ||||
