LONDON (Alliance News) - Falkland Islands Holdings PLC Tuesday said that profitability in the first five months of its financial year will be lower than the prior year due to investments it has made to strengthen the infrastructure of the group's operating subsidiaries in the UK.
The owner of services companies in the Falkland Islands and the UK said that lower profitability was as expected and that the group's trading performance was robust in the five-month period.
Retail sales in the company's flagship West Store supermarket in the Falkland Islands in the 22 weeks to August 30 were 2.7% ahead of 2014 levels, it said, while trading activity in the Falkland Islands Co has remained at a high level following the arrival of the Eirik Raude drilling rig in March, it added.
In the UK, the group's art storage business, Momart, experienced a reduction in revenue from museum exhibitions at the start of the year reflecting a lower opening order book at April 1, however this has since recovered and order books at the end of August are now 12% ahead of the prior year, Falkland said.
"The board continues to review options to expand its UK operations through strategic acquisitions that will provide both economies of scale and increased business focus. In the Falklands the significant capital investment undertaken by the group since the discovery of oil in 2010, leaves FIH well placed to take full advantage of the opportunities which will be associated with oil and gas development. The board remains confident that oil will be developed in the Falklands but the timing is likely to be heavily dependent on a recovery in the oil price," Chairman Edmund Rowland said in a statement.
"With oil development activities in the Falklands still awaiting sanction until the oil price recovers and there is a confirmed commitment to proceed to production in the Falklands, the group will focus on the development of its existing UK businesses adding to them where possible by synergistic acquisitions to enhance the scale and reach of the group's operations. A satisfactory trading performance is expected for the full year," he added.
Shares in Falkland were untraded on Tuesday morning, last trading at 225.70 pence.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
Copyright 2015 Alliance News Limited. All Rights Reserved.
