Cape plc Trading Update (9886I)
August 01 2012 - 2:01AM
UK Regulatory
TIDMCIU
RNS Number : 9886I
Cape plc
01 August 2012
Embargoed: 0700hrs 1 August 2012
Cape plc
("Cape" or the "Group")
Trading Update
Cape plc, the international provider of essential,
non-mechanical support services principally to the energy and
mineral resources sectors, today provides the following update.
The trading performance of Cape's Onshore business unit in
Australia (reported as part of Cape's Far East/Pacific Rim Region)
deteriorated sharply in the second quarter. Following a review of
this business, it has become clear that the trading performance for
the Far East/Pacific Rim Region for the remainder of the year will
be well below management's previous expectations. Lower revenue,
combined with increasing pricing pressure, has led to operating
margins being significantly lower than previously expected. With
delays in major project work in Australia now apparent, no
improvement in activity levels is expected in the near term. A
review of the region's business structure is now underway and an
initial overhead cost reduction plan has been implemented.
Management now expects revenue from this region for the year to 31
December 2012 to be slightly less than that of 2011 and operating
margin, before the impact of any restructuring, to reduce to
approximately half of 2011 levels.
In the Far East/Pacific Rim, the Group is more exposed to the
construction support services cycle than in other more mature
regions in which Cape enjoys leading market positions, underpinned
by a solid maintenance support services base with multi-year
contracts. Whilst capital spending in the Far East/Pacific Rim
region is expected to benefit Cape strongly over the medium term,
the timing of work releases on the major projects remains
uncertain.
The deterioration in performance in the Far East/Pacific Rim
Region will have a significant effect on overall Group performance
in the near term. The Group is therefore unlikely to meet previous
expectations for the year to 31 December 2012 and, whilst steps are
being taken to restructure the region's business unit, the
challenging conditions in the Far East/Pacific Rim Region are
expected to persist into 2013.
The UK Region continues to trade strongly supported by long term
maintenance contracts. Activity levels in the Middle East show good
growth albeit at lower margins. In the CIS & North Africa
Region activity levels remain robust and the one off charge
previously announced in respect of the GL3 Z LNG project in Arzew
in Algeria is expected to remain sufficient.
Cape will report results for the six months ended 30 June 2012
on 30 August 2012.
-Ends-
Cape plc
Joe Oatley, Chief Executive Officer
Tel. +44 (0)20 3178 5498
M: Communications
Patrick d'Ancona or Ben Simons
Tel. +44 (0)20 7920 2340
About Cape:
Cape plc (www.capeplc.com), which is listed on the main market
of the London Stock Exchange, provides a range of non-mechanical
industrial services including access systems, insulation, painting,
coatings, blasting, industrial cleaning, training and assessment to
both industrial plant operators and major international engineering
and construction companies.
As a single source provider, Cape is able to provide a range of
specialist multi-disciplinary services specifically tailored to
meet the needs of the client providing the most intelligent and
cost efficient solutions for our customers' non-mechanical in-plant
maintenance and capital needs.
In the year ended 31 December 2011, Cape reported revenues of
GBP722.5 million. With scale and leading market positions across
its international footprint, Cape employs over 19,000 people in 30
countries.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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