TEESSIDE SCAFFOLDER
Well-known member
November 12, 2012 9:16 am
Cape shares slide on third profit warning
By Michael Kavanagh
Shares in Cape slid by nearly a third after the oil and gas services group issued its third profits warning of this year and announced the immediate departure of its chief financial officer.
Cape blamed further trading problems in Australia for a deterioration in prospects and also warned on Monday of further problems in the progress at a key project at an liquefied natural gas project in Algeria which dragged down interim profits earlier this year.
The group said a combination of problems would see it “deliver a full-year operating profit performance significantly below previous expectations”. It added: “Until the detailed review of balance sheet items is complete there remains uncertainty in the eventual outcome of the full-year performance.”
The company said Richard Bingham, its group chief financial officer, was standing down “by mutual consent with immediate effect”.
Cape said on Monday it was continuing to grapple with a "substantial deterioration in the performance of the group's onshore Australian business driven by both a further downturn in current trading and the recognition of a number of legacy issues".
Cape said provisions against losses caused by delays at the Arzew project in Algeria remained unchanged, but that it was talks with its client to secure compensation for additional costs incurred by Cape because of slow progress on work prompted the customer.
A warning in May that it would take a one-off £14m charge on losses on this work in Algeria prompted its shares to shares to fall by a third to 200.5p on the day.
That warning followed a previous profits warning issued last November due to write-offs on a fixed-price UK rig maintenance contract.
Cape’s subsequent hiring of Joe Oatley from Hamworthy as chief executive then helped boost the share price but the company was forced to issue another warning in August as it blamed delays to liquefied national gas projects and failure to win expected contracts in Australia.
The company, which provides a range of scaffolding, insulation, coatings and maintenance for a variety of industrial installations worldwide, declined to quantify any likely hit to its expected full-year profits figure.
But that warning also prompted Cape’s shares to slide by a third on the day after a period of recovery to 187p on the day and analysts to trim full-year profits forecasts from £60m to about £40m.
Ahead of the series of warnings several years of improved performance had helped erase long memories of previous problems at a company previously burdened by high debt levels and asbestos liabilities, which have since been ringfenced.
The company was promoted from Aim to London’s main list in June 2011 and in 2010 paid its first dividend in 10 years.
In early trading on Monday, Cape shares were down 82p to 180p.
A broker, Investec, cut its full-year profits forecast from £36m to £31m on Monday, compared with last year’s total of £69m.
Cape shares slide on third profit warning
By Michael Kavanagh
Shares in Cape slid by nearly a third after the oil and gas services group issued its third profits warning of this year and announced the immediate departure of its chief financial officer.
Cape blamed further trading problems in Australia for a deterioration in prospects and also warned on Monday of further problems in the progress at a key project at an liquefied natural gas project in Algeria which dragged down interim profits earlier this year.
The group said a combination of problems would see it “deliver a full-year operating profit performance significantly below previous expectations”. It added: “Until the detailed review of balance sheet items is complete there remains uncertainty in the eventual outcome of the full-year performance.”
The company said Richard Bingham, its group chief financial officer, was standing down “by mutual consent with immediate effect”.
Cape said on Monday it was continuing to grapple with a "substantial deterioration in the performance of the group's onshore Australian business driven by both a further downturn in current trading and the recognition of a number of legacy issues".
Cape said provisions against losses caused by delays at the Arzew project in Algeria remained unchanged, but that it was talks with its client to secure compensation for additional costs incurred by Cape because of slow progress on work prompted the customer.
A warning in May that it would take a one-off £14m charge on losses on this work in Algeria prompted its shares to shares to fall by a third to 200.5p on the day.
That warning followed a previous profits warning issued last November due to write-offs on a fixed-price UK rig maintenance contract.
Cape’s subsequent hiring of Joe Oatley from Hamworthy as chief executive then helped boost the share price but the company was forced to issue another warning in August as it blamed delays to liquefied national gas projects and failure to win expected contracts in Australia.
The company, which provides a range of scaffolding, insulation, coatings and maintenance for a variety of industrial installations worldwide, declined to quantify any likely hit to its expected full-year profits figure.
But that warning also prompted Cape’s shares to slide by a third on the day after a period of recovery to 187p on the day and analysts to trim full-year profits forecasts from £60m to about £40m.
Ahead of the series of warnings several years of improved performance had helped erase long memories of previous problems at a company previously burdened by high debt levels and asbestos liabilities, which have since been ringfenced.
The company was promoted from Aim to London’s main list in June 2011 and in 2010 paid its first dividend in 10 years.
In early trading on Monday, Cape shares were down 82p to 180p.
A broker, Investec, cut its full-year profits forecast from £36m to £31m on Monday, compared with last year’s total of £69m.
