Cape plc AGM Statement (8374X)
11 May 2016 - 4:00PM
UK Regulatory
TIDMCIU
RNS Number : 8374X
Cape plc
11 May 2016
11 May 2016
Cape plc
("Cape" or the "Group")
AGM Statement
Cape plc, the international provider of critical support
services to the energy and natural resources sectors, today issues
the following AGM Statement for the period 1 January 2016 to date,
incorporating the first quarter's results from 1 January 2016 to 3
April 2016. Trading in the first quarter was mixed with solid order
intake and revenue, but lower than expected margins; nonetheless,
the Board's expectations for the full year performance remain
unchanged.
Trading for the first quarter of 2016
The Group's overall trading for the first quarter was mixed.
Order intake was solid and the resultant Group order book, as at
the end of the first quarter 2016 was GBP862m (31 December 2015:
GBP861m). Revenues developed positively as the Group benefitted
from favourable foreign exchange rate movements and a faster than
expected ramp up on the Wheatstone project in Australia. The Group,
experienced a greater downward pressure on margins than previously
anticipated and, as a result, Group operating profit was below
expectations.
Each of our regions delivered margins below previous
expectations. Downward pressure on margins in the UK was largely
driven by costs at the Fawley site continuing to run at a level
higher than expected and lower utilisation of our specialist
services in the North Sea. MENA margins were adversely impacted by
delays in project initiation in Oman and pricing pressures in the
UAE and Qatar. The KSA business has continued to perform strongly,
with both volume and margin higher than expectations. The Asia
Pacific business benefitted from a significant ramp up in revenues
at Wheatstone which partly offset the adverse effect of project
demobilisation costs and reduced volumes across many of the Asian
businesses.
There have been no material developments in respect of the
ongoing industrial disease insurer product liability litigation
since the publication of the Group's 2015 Annual Report and
Accounts.
Outlook
The UK North Sea and coal fired power station sectors are
expected to continue to be challenging, with the downstream and
general industrial markets remaining robust. Despite the overall
weakness in the UK market, the UK business is expected to deliver
some recovery in margins in the second half of the year due to a
combination of improved contract performance and the benefit of a
refocussing of the organisation, currently underway.
Market conditions in the MENA region are expected to improve in
the second half of the year with KSA continuing to be robust and
increasing project activity in Oman and Kuwait offsetting ongoing
weakness expected in Qatar and the UAE. As a result the region is
expected to deliver a stronger revenue and margin performance in
the second half of the year.
Activity levels remain mixed across the Asia Pacific region with
weakness in much of Asia mitigated by increasing activity levels
from the LNG sector in particular in Australia. The region is
expected to benefit from increased volume on the Wheatstone, KLE
and Prelude projects offsetting lower volumes and utilisation
across its Philippines, Thailand and Indonesian businesses.
The Board's expectations of the full year performance are
unchanged; with a higher than usual weighting of earnings in the
second half as the weaker first quarter is offset by increasing
levels of activity during the year and the continuing benefit of
current favourable foreign exchange rates.
Cape expects to announce its results for the half year ending 3
July 2016 on 23 August 2016.
Enquiries:
For more information contact:
Joe Oatley, Chief Executive, Cape plc
joe.oatley@capeplc.com
+44 (0)18 9545 9979
Michael Speakman, Chief Financial Officer, Cape plc
michael.speakman@capeplc.com
+44 (0)18 9545 9979
Bobby Morse, Ben Romney and Helen Chan, Buchanan
benr@buchanan.uk.com
+44 (0)20 7466 5000
Forward looking statements
Any forward looking statements made in this document represent
the Board's best judgement as to what may occur in the future.
However, the Group's actual results for the current and future
fiscal periods and corporate developments will depend on a number
of economic, competitive and other factors, some of which will be
outside the control of the Group. Such factors could cause the
Group's actual results for future periods to differ materially from
those expressed in any forward looking statements included in this
announcement.
About Cape:
Cape (www.capeplc.com) is an international leader in the
provision of critical industrial services principally to the energy
and natural resources sectors. Cape provides a multi-disciplinary
service offering including the traditional services of access,
insulation, coatings and mechanical, and a range of specialist
services including oil and gas storage tanks, heat exchanger
replacement and refurbishment, and environmental services.
Cape employs c. 16,400 people working across 19 countries and in
2015 reported revenue of GBP711.4 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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