Bloomberg News

Cape Rises Most in Six Months on Outlook for Higher Margins

March 06, 2013

Cape Plc (CIU), a supplier of scaffolding, fire protection and cleaners to energy companies, rose by the most in six months in London trading after saying operations are improving after a loss last year.

The shares gained 11 percent, the biggest increase since Aug. 20, to 259 pence. That gives the company a market value of 314 million pounds ($473 million).

The company posted a pretax loss of 140 million pounds after charges and delays at projects in Algeria and Australia. Cape said it continues to generate cash and that margins should improve this year after slipping to 4.2 percent in 2012 from 11.2 percent a year earlier.

“2013 will be a bit of a recovery year,” Chief Executive Officer Joe Oatley said in a telephone interview. “The long- term trend is for margins at 9 percent to 10 percent. We’ve got a lot of work coming down the pipe over the next couple of years.”

Oatley, who started in June, is focusing on improving operations after shares fell almost 50 percent in the two years through 2012. The company is taking action to prevent cost overruns and contract delays that affected projects such as those in Algeria and Australia.

Sales rose 7 percent in 2012 to 749.4 million pounds, in line with the gain predicted in November, the company said in a statement today. Adjusted profit before tax fell to 23.8 million pounds from 69.4 million pounds.

The company maintained its dividend at 14 pence per share.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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