Cape sees slowdown in 2018 Asia Pacific construction volumes
Cape delivered a strong operational and financial performance at the half-year stage even as it told shareholders to expect rougher seas ahead.
Cape
263.12p
16:50 06/10/17
FTSE All-Share
4,367.19
13:25 23/04/24
FTSE Small Cap
6,435.46
13:25 23/04/24
Support Services
10,609.36
13:25 23/04/24
Revenue surged 46.8% to £581.9m from £396.3m in the first half of 2016.
That drove a 125.9% jump in the company's operating profits to £42.7m from £18.9m in the previous year, while profits before tax rocketed by 2.250% to £32.9m from £1.4m in the prior year.
Cape boss Joe Oatley said: "The board's expectation for the Group's full-year performance remains unchanged with the anticipated reduction in construction related activities in Asia Pacific resulting in the Group's earnings being strongly weighted towards the first half of 2017."
"The board continues to anticipate that 2018 will be a more challenging year, driven by the expected reduction in volume from the current high level of construction activity in Asia Pacific and the effect of project delays and margin pressures in the Middle East."
Operating margins at the provider of critical industrial services to the energy and natural resources sectors also improved, increasing by 250 basis points to 7.3% from 4.8% in 2016.
UK margins increased as a result of an improved commercial performance and the benefit of the restructuring undertaken in 2016, while in the Middle Eastern they were significantly lower due to increasing pricing pressure and a mix of services with lower activity levels for higher margin access work.
Meanwhile, the Asia Pacific region achieved both excellent operational performance and a significant increase in project activity.
Adjusted operating cash flows improved to £38.6m from £13.8m in the first half of the year previous, reflecting good working capital management and a temporary benefit at the period end from the timing of certain customer receipts, the company said.
Cash performance was also robust, Cape said, leading to lower adjusted net debt of £76.4m from £80.4m in October 2016 and £113m on 3 July 2016.
In anticipation of its upcoming takeover by Altrad, the company opted not to pay an interim dividend, versus a 4.5p per share payout one year ago.
The company's shares were up 1.76% to 259.75p by 10:55 BST.