CIU.L Regulatory News (CIU)

Embargoed: 0700hrs, 30 August 2012

Cape plc

("Cape" or the "Group")

INTERIM RESULTS: Half Year ended 30 June 2012 (unaudited)

Cape plc, the international provider of essential, non-mechanical support services to the energy and mineral resources sectors, announces its results for the half year ended 30 June 2012.

Difficult period but continued revenue growth, substantial forward order book and maintained interim dividend

Financial summary

AER - Actual exchange rates; CER - Constant 2011 exchange rates

Highlights

• Revenue growth of 9.8% CER with growth in our three largest regions. Underlying organic growth of £23.0m (6.9%)

• H1 operating profit impacted by operational weakness on the Arzew project in Algeria and margin reduction in the onshore business in Australia

• UK revenue increased by 9% to a record £148m, excluding acquisitions, driven by additional offshore maintenance work for North Sea operators

• Completed acquisition of Hong Kong Fuji Technology Co., Ltd ("HFT") in Hong Kong for a consideration of HKD 58m (£4.75m) in March 2012, establishing a position in the maintenance market in this region. All three acquisitions made in the last 18 months have performed in line with, or ahead of, expectations

• Substantial forward order book at 30 June 2012 of £920m (H1 2011: £830m)

• Comprehensive business review of Far East/Pacific Rim operations underway

• Interim dividend maintained at 4.5p per share (H1 2011: 4.5p)

Commenting on the results, Joe Oatley, Chief Executive of Cape said:

"In my first few weeks at Cape I have focused on gaining a rapid understanding of our businesses around the world. Whilst this is clearly a challenging period for the Group, I am pleased to say that, having carried out an initial review of all of our operations, I continue to believe that the core of the business is fundamentally strong. Outside the Far East/Pacific Rim Region and the Arzew project in Algeria, the Group's operations are performing in line with expectations. Our near-term focus is on addressing the operational issues in Australia and ensuring that we have the foundations in place around the Group to deliver consistent long-term growth in earnings. The Group's substantial order book provides good near-term visibility and we remain confident of achieving the recently revised expectations for the current financial year."

Analyst meeting

The Group will be presenting to a meeting of analysts at 9.30am today. The presentation will be available on the company's website later today at www.capeplc.com/investors/financial-results-and-presentations.aspx

Throughout this document, various non-statutory measures are used and referred to as adjusted. These are defined and reconciled to their statutory equivalents in note 5

.

Enquiries:

Forward looking statements

Any forward looking statements made in this document represent the Board's best judgment as to what may occur in the future. However, the Group's actual results for the current and future fiscal periods and corporate developments will depend on a number of economic, competitive and other factors, some of which will be outside the control of the Group. Such factors could cause the Group's actual results for future periods to differ materially from those expressed in any forward looking statements included in this announcement.

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 £722.5 million. With scale and leading market positions across its international footprint, Cape employs over 19,000 people around the world.

Chairman's statement

Increased revenue and strong order book but a difficult period for Cape

Cape increased revenue in the first half and enjoyed a strong forward order book with 90% of 2012 consensus revenues already contracted. However, this has been a difficult period for Cape, our financial performance has been undermined by operational weaknesses specific to the Arzew contract in Algeria and a downturn in our onshore business in Australia.

On 25 May 2012, we announced a £14m one-off charge in respect of losses arising from the Arzew LNG project in Algeria. On 1 August 2012, we announced that operating margins had deteriorated significantly in our onshore business in Australia in Q2 and that, as a result, trading in the Far East/Pacific Rim Region would be unlikely to meet management's previous expectations for the year. A comprehensive review of our business operations and assets in the Far East/Pacific Rim is underway, led by our new Chief Executive Joe Oatley.

Solid execution in core regions with acquisitions performing well

Our largest business, the UK Region, made good progress in executing the restructuring plan put in place in Q4 2011, and delivered a solid first half performance. As expected, the Gulf/Middle East Region recorded its first revenue growth since 2009 but operating margins were at lower levels reflecting the region's exposure to the construction support services cycle. The strong position that Cape has built in the maintenance and shutdown support services market will help underpin the region's performance going forward. In addition, all three of our bolt-on acquisitions completed over the past 18 months, including our Hong Kong acquisition in March 2012, have performed either in line with, or ahead of, our expectations.

New Executive leadership and Board appointment

We are grateful to Brendan Connolly for stepping in as Interim CEO following the resignation of Martin May on 29 March 2012. On 30 May, we announced the appointment of Joe Oatley as Chief Executive with effect from 29 June 2012. Joe was previously CEO of Hamworthy plc and is well equipped with the track record and business experience to lead the Group through its next phase of development and success. We announced on 22 August the appointment of Leslie van de Walle as a Non-Executive Director. Leslie has had a distinguished business career and is currently Chairman of SIG plc. As previously announced, David McManus has stepped down from the Board after eight years which included serving as Chairman from 2006 to 2008. We thank David for his major contribution to the restructuring and growth of Cape over that period.

Cape's strength

Cape's continued commitment to deliver superior execution with an uncompromising approach to safety remains paramount. The Cape brand provides our clients with the reassurance that critical support services for their plant maintenance and construction needs will be provided efficiently and safely. This was again acknowledged by our clients with the award of the prestigious 'Global Contractor EHSS Award - First Place' by SABIC and we were selected by Borouge as the 'Best HSE Performer of the Year - 2011' on the Borouge petrochemicals complex.

Maintained interim dividend reflects confidence in future

The Board has declared a maintained interim dividend of 4.5p per share (H1 2011: 4.5p). This will be payable on 5 October 2012 to shareholders on the Register at 7 September 2012.

Outlook

The Group's immediate focus is on ensuring we have the organisational structure and operational processes to face and address near-term challenges and deliver future growth. We anticipate continued growth in the demand for our services in the medium and long-term and the Board is confident that the Group is well positioned to be able to deliver long-term value to shareholders.

Tim Eggar

Chairman

30 August 2012

HALF YEAR MANAGEMENT REPORT

Financial overview

Group revenue in the first half increased by 10.9% to £371.6m (H1 2011: £335.0m). The increase comprises underlying organic growth of £23.0m, together with a contribution from acquisitions of £9.7m and a positive impact from currency translation of £3.9m.

Adjusted profit before tax reduced to £12.0m (2011: £34.0m) reflecting:

• the one-off charge of £14.0m in respect of current and estimated future losses on the Arzew LNG contract in Algeria as announced on 25 May 2012;

• a weakening of adjusted EBITA margins in the Far East/Pacific Rim Region (PBT impact £6.7m) as announced on 1 August 2012;

• the anticipated reduction in adjusted EBITA margins in the Gulf/Middle East Region as the market in that region matures (PBT impact: £6.1m); partially mitigated by:

• good growth in the UK; and

• the positive contribution from recent acquisitions.

Adjusted diluted earnings per share were 7.0 pence (H1 2011: 20.9 pence).

Organisational developments

An enhanced group-wide project review process was implemented in April 2012. This process identified that Cape's Algerian contract for the Arzew LNG project was not performing to plan. Following a detailed operational review in May 2012, management and organisational changes were implemented resulting in the single contract Mediterranean & North Africa business unit now reporting into the Gulf/Middle East Region.

Comprehensive business review of Far East/Pacific Rim based operations and assets

On 1 August 2012 Cape announced that its trading performance for the Far East/Pacific Rim Region would be well below management's previous expectations. A comprehensive business review of the Group's Far East/Pacific Rim-based operations and assets has commenced with the aim of both improving profitability and better positioning the business to win and execute major project work in the region.

Initial cost reduction measures have been implemented and it is anticipated that the review will result in a broader restructuring of the Far East/Pacific Rim business. Whilst early in the process, Cape expects that the review will identify further cost savings and operating efficiencies to improve profitability over time. As part of this review, Cape will also assess the carrying value of the assets acquired in the Australian acquisition programme of 2007, being principally goodwill of £150.1m and non-current assets of £100.2m. The assessment will take account of market conditions, the current reduced margin delivery and the significant translation impact within the carrying value of the assets. Any future charge recognised against the carrying value of these assets will be treated as a non-cash exceptional item.

Cape remains well positioned to benefit from the positive long-term demand growth characteristics for its core services in the region driven by the several large LNG projects currently underway. Whilst the Group has the capability to win a share of this work, changes to project schedules and competitive activity are likely to reduce order intake expectations in the short term. Nevertheless, the Group continues to expect that the challenges in providing sufficient capacity in the industry to deliver these projects will intensify over the coming years providing an attractive environment for the delivery of our services.

Regional segmental review

The Group reports its financial results from a geographic perspective under four reporting regions. Given the size and nature of the loss on the Algerian contract, this is shown separately in the table below.

Definitions and reconciliation of non-statutory measures to their statutory equivalents can be found in note 5.

Notes:

 Adjusted EBITA is shown pre-franchise fee

 CIS/Med & North Africa Adjusted EBITA excludes the Algerian contract

UK Region 39.8% of Group revenue (excluding acquisitions)

Revenue in the UK Region increased by 8.7% at CER to a record £148.0m (H1 2011: £136.2m) and combined with a steady Adjusted EBITA margin of 9.6% (H1 2011: 9.4%) resulted in record Adjusted EBITA of £14.2m (H1 2011: £12.8m). The results exclude the contribution from the York Linings acquisition completed in July last year discussed below under Acquisitions.

The revenue growth in the first half largely reflects additional offshore maintenance work for North Sea operators. In addition there was a strong take up of our specialist environmental services by our core offshore clients.

The more cohesive management and organisational structure put in place last year has provided more opportunities for cross selling of the Group's specialist services.

The Group's business in the UK continues to be largely maintenance based with over 90% of revenues in the region derived from maintenance support services both onshore and offshore.

In addition to the core term maintenance portfolio, significant project work included:

• the Aromatics process maintenance shutdown at the Wilton plant for SABIC;

• the rejuvenation works at the Redcar steel works for SSI;

• access work for the 2nd Aircraft Carrier for BAE Systems;

• campaign work for BP on their Andrew and ETAP assets; and

• cleaning at the TOTAL Elgin platform.

Gulf/Middle East Region 20.3% of Group revenue

Cape's business in the Gulf/Middle East Region delivered its first revenue growth since 2009, though the Adjusted EBITA margin reduced, as expected. Revenue grew by 12.4% at CER to £75.5m (H1 2011: £66.1m) driven by the commencement of work on packages won on several major downstream projects in Abu Dhabi last year as well as high levels of activity on the PDO facility in Mukhaizna, Oman.

Adjusted EBITA margins reduced to 16.3% (H1 2011: 24.4%) resulting in a reduction in Adjusted EBITA of 23.6% to £12.3m (H1 2011: £16.1m). The reduction in margin was largely driven by the maturing nature of the market in the region leading to a change in business mix, with reduced demand for higher margin construction support services and an increased level of lower margin maintenance activities, and an increasingly competitive landscape.

We continued to successfully grow our maintenance base, with maintenance support revenues accounting for 40% of revenues in the period (H1 2011:35%). We provided maintenance support services at 76 sites (H1 2011: 69) across the region. Significant contract awards in the first six months included:

• a five-year surface preparation and coating services contract from The Bahrain Petroleum Company B.S.C ("BAPCO") worth US$18m. Cape has further secured an US$8 million, three-year extension of an insulation contract with BAPCO;

• multiple contracts on the Barzan Gas Project in Qatar with a combined contract value estimated at US$25m over two years commencing in 2013; and

• a further two year extension to our term maintenance contract with Qatargas covering all seven LNG producing trains.

The business has also invested in the establishment of operations in India, which resulted in a small reduction in regional operating margin in H1 2012. Following our work in Iraq last year, we continue to evaluate this market and expect to establish operations in country in the second half of 2012.

CIS, Mediterranean & North Africa Region 6.5% of Group revenue

Revenue reduced to £24.1m (H1 2011: £28.3m), largely driven by reduced activity levels in Kazakhstan. The £9.1m Adjusted EBITA loss in the period reflects the £14.0m (H1 2011: nil) charge recognised in respect of losses arising on the Algerian contract as announced on 25 May 2012, with the remainder of the region continuing to deliver strong operating performance.

Cape's activities in the CIS (Commonwealth of Independent States) are centred around construction support activities at the Kashagan project in Kazakhstan and both construction and maintenance support activities on Sakhalin island, with both areas continuing to perform in line with expectations.

In Azerbaijan, target contracts have been postponed until 2013 and consequently our joint venture with SOCAR continued to register a small loss of £0.3m (H1 2011: loss of £0.3m).

Far East/Pacific Rim Region 30.8% of Group revenue (excluding acquisitions)

The revenue increase of 7.2%, at CER, to £114.3m (H1 2011: £104.4m) was more than offset by the reduction in Adjusted EBITA margin to 2.8% (H1 2011: 8.7%), resulting in a decrease in Adjusted EBITA to £3.2m (H1 2011: £9.1m). These results exclude the contribution from the ShoreGuard and HFT acquisitions. As announced on 1 August 2012, the current trading performance of the region is well below previous expectations and a comprehensive review of Cape's business structure and operations in the region is now underway. Although management has taken immediate action to reduce overhead costs, this is not expected to provide a material improvement to margins during this year.

Construction support revenues grew by 23.4% to £81.8m (H1 2011: £66.3m) almost entirely driven by offshore work on the Kippa Tuna Turram and North Rankin field development projects in Australia and the Kumul Marine Terminal upgrade in Papua New Guinea. The margin performance of Cape's much larger onshore construction support services operations deteriorated sharply in the second quarter with operating margins significantly lower than previously expected. The key drivers were:

• completion of higher margin major contract work in Australia;

• continued delays in the award of major projects and intense price competition for smaller field and workshop orders in Australia;

• a major contract in Asia switching to a lower margin cost reimbursable pricing structure in March; and

• the growth in Cape's overhead structure in the region.

Revenues in our maintenance support services operations reduced to £24.5m (H1 2011: £27.8m) with margins maintained at similar levels to last year. Cape continued to provide maintenance services at 19 onshore plants across the region as well as our offshore contracts at Bayu-Undan and Malampaya.

Revenues in Cape's Access Solutions business, which primarily supports the commercial and residential construction industry in Australia, reduced to £8.0m (H1 2011: £10.3m), reflecting the closure of the Brisbane depot in Queensland in the final quarter of last year.

Acquisitions

The Group completed the acquisition of HFT in March 2012 for a total consideration of HKD 58m (£4.75m). This business is focussed on the maintenance market in Hong Kong and provides a base for expanding the Group's presence in this region.

All three acquisitions completed over the past eighteen months have performed in line or ahead of expectations.

It is particularly pleasing that York Linings, the refractory lining business based in the UK and acquired in July last year, is now working with our international businesses to identify and bid in work across our global footprint. An early success has been the award of a $6m (£3.8m) package on the EMAL Emirates Aluminium Smelter project in Abu Dhabi.

The Group continues to see bolt-on acquisitions as an important component in achieving our growth objectives and we expect to complete further acquisitions as and when businesses meet our criteria and valuation objectives.

Central costs

Central costs increased to £6.2m (H1 2011: £4.1m), largely reflecting one-off management termination and recruitment costs of £0.9m.

Finance charge

Net finance costs (excluding non-operating other items) reduced to £3.8m (H1 2011: £4.2m) and included finance lease interest of £0.2m (H1 2011:£0.4m). Deposit interest (on operational cash balances) was £0.1m (H1 2011: £0.1m). Interest cover (calculated by dividing adjusted operating profit by the adjusted finance costs) reduced to 4.1 times (H1 2011: 9.0 times) reflecting the reduced profitability and the charge relating to the Algerian contract in the period.

Taxation

The tax charge on profit before tax is equivalent to an annual effective tax rate of 20.2% (H1 2011: 21.0%). This is in line with the 19.7% achieved for the full year 2011. Tax paid in the period increased to £4.8m (H1 2011: £4.0m).

Operating and free cash flow

* At average rates

** Before non-operating other items

The reduced profitability and further working capital consumption resulted in an operating cash outflow for the period of £5.6m (H1 2011: £0.9m inflow). A negative free cash flow of £14.3m (H1 2011: £7.8m outflow) combined with payment of dividends and the HFT acquisition resulted in an increase in net debt of £29.9m to £89.1m. The Group's balance sheet gearing, excluding ring-fenced IDC Scheme funds, increased to 22.3% (31 December 2011: 14.6%; 30 June 2011: 19.5%).

Increase in working capital

Investment in trade and other receivables and inventories increased to £274.5m (31 December 2011: £244.5m) partially offset by an increase in trade and other payables of £4.6m to £127.4m (31 December 2011: £122.8m), giving an increase in net working capital of £25.4m (at balance sheet rates) to £147.1m. Approximately £12m of this increase arises from the usual seasonal outflow in the UK Region as it enters the outage season in the power industry and is expected to reverse in the second half. The remainder of the increase is driven by the Gulf/Middle East Region primarily reflecting an increase in insulation materials for contracts in Abu Dhabi and an increase in the Far East/Pacific Rim Region primarily relating to a specific large project in Asia.

The net working capital to sales ratio increased to 20% (2011: 17%) and continues to run ahead of the Group's historical 13% - 14% range. The extended working capital investment continues to be driven by:

• a specific large project in Asia;

• investment in materials in the Group's Algerian contract; and

• an across the portfolio increase in working capital investment in the Gulf/Middle East Region.

Capital expenditure

Capital expenditure reduced to £5.5m (H1 2011: £11.0m) with the Asset Replacement Ratio (calculated by dividing gross capex spend by the depreciation charge) reducing to 67.5% (H1 2011: 128%).

Forward order book Note (i)

The Group's forward order book at 30 June was ahead of the same point last year at c.£920m (H1 2011: c.£830m) with some 90% of 2012 consensus revenues secured (H1 2011: 91%).

Principal risks

Cape operates globally in the energy and natural resources sectors and in varied geographic markets. The principal risks and uncertainties that are or may be faced were disclosed in the 2011 Annual Report, and these are expected to continue to be relevant for the remaining six months of the year.

The risks, set out on pages 19 and 20 of the 2011 Annual Report, include external, competitive and operational factors.

In addition to those risks identified in the 2011 Annual Report, project performance is considered as a potential risk to the Group's financial performance. The Group has a process of project risk identification and mitigation from tender through to project completion.

Outlook

Global demand for the Group's services remains robust with continued investment in infrastructure for the oil & gas market and maintenance activities across the power generation, mining and oil & gas markets. The Group's UK operations continue to show steady growth at stable margins as the Group maintains its market leadership position. Activity levels in the Middle East are expected to remain stable through the remainder of 2012, partly mitigating the expected reduction in margin in this region as it continues to mature.

In the Far East/Pacific Rim Region, activity is expected to remain at current levels in the near-term with no additional major project work expected to commence this year. Given the challenging business conditions the Group is experiencing in the Australian onshore market, it is anticipated that the current reduced operating margins in the Far East/Pacific Rim Region will continue for the remainder of 2012, excluding the impact of any restructuring, pending the outcome of the comprehensive business review. The CIS, Mediterranean & North Africa Region is expected to show a significant improvement in performance in the second half of 2012 as benefits of improved productivity on the Arzew project in Algeria are realised.

With a strong order book giving good near-term visibility, the Board is confident of meeting recently revised expectations for the year ending 31 December 2012.

The near-term focus is to ensure that the Group has a robust platform, principally in terms of its organisational structure and operational processes, from which it can deliver future growth. Over the medium and longer term, it is expected that demand for the Group's services will continue to grow driven by the increasing need for investment in both new and existing infrastructure in the power generation, oil & gas and mining industries. With market leading positions in its current markets and a number of opportunities to grow into new areas, the Group is well positioned to deliver long-term earnings growth and the Board looks to the future with confidence.

Joe Oatley

Chief Executive

Richard Bingham

Chief Financial Officer

30 August 2012

Note (i): The Group's Forward Order Book comprises:

·; Maintenance Support Services: The estimated value of our future services to support contractually committed base maintenance programmes for the contractual term period only. Typical contracts are three to five year agreements with extension options. It does not assume any value for optional extension periods not yet confirmed but does include a value for planned shutdowns/outages where a contractual commitment has been received; and

·; Construction Support Services: The value of services to be provided on current contracts based on client work schedules together with confirmed new orders received. Contracts are typically unit rate or defined scope packages reflecting client's needs to retain flexibility on large and complex projects.

Statement of directors' responsibilities

The Interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. The Disclosure and Transparency Rules ("DTR") require that the accounting policies and presentation applied to the half-yearly figures must be consistent with those applied in the latest published annual accounts, except where the accounting policies and presentation are to be changed in the subsequent annual accounts, in which case the new accounting policies and presentation should be followed, and the changes and the reasons for the changes should be disclosed in the Interim report, unless the United Kingdom Financial Services Authority agrees otherwise.

The directors confirm that to the best of their knowledge the condensed set of financial statements, which have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group, as required by DTR 4.2.2 and in particular include a fair review of:

• the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements as required by DTR 4.2.7;

• the principal risks and uncertainties for the remaining six months of the year as required by DTR 4.2.7; and

• related party transactions that have taken place in the first six months of the current financial year and changes in the related party transactions described in the previous annual report that have materially affected the financial position or performance of the group during the first six months of the current financial year as required by DTR 4.2.8.

The directors of Cape plc are:

Tim Eggar (Chairman)

Joe Oatley (CEO) appointed 29 June 2012

Richard Bingham (CFO)

Brendan Connolly (Independent Non-Executive Director)

Michael Merton (Independent Non-Executive Director)

Leslie Van de Walle (Independent Non-Executive Director) appointed 22 August 2012

Martin May resigned on 29 March 2012 and David McManus resigned on 22 August 2012.

For and on behalf of the Board of Directors:

Richard Bingham

Chief Financial Officer

30 August 2012

Independent review report to Cape plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012, which comprises the Condensed Consolidated Income Statement, Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Cash Flow Statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLP

Chartered Accountants

30 August 2012

Uxbridge

Notes:

(a) The maintenance and integrity of the Cape plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

(a) Relates wholly to expenses incurred in the prior period as a result of the return to the full list and corporate restructure.

(b) Includes £0.5m (H1 2011: £0.5m) of Scheme interest as shown in note 6.

(c) Includes £2.0m (H1 2011: £2.0m) unwind of discount in respect of IDC provision and £nil (H1 2011: £1.3m) unamortised facility fee as shown in note 6.

 (d) IDC refers to the Industrial Disease Claims which are funded using the Scheme funds.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

FOR THE HALF YEAR ENDED 30 JUNE 2011

* The Special Reserve was created in 2007 by court order upon cancellation of the share premium and retained earnings. The Special Reserve is undistributable and restrictions exist over its use.

** Other reserves relates to hedging reserves held in respect of cashflow and net investment hedges, and the difference arising on consolidation of the new parent undertaking.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (AUDITED)

FOR THE YEAR ENDED 31 DECEMBER 2011

* The Special Reserve was created in 2007 by court order upon cancellation of the share premium and retained earnings. The Special Reserve is undistributable and restrictions exist over its use.

** Other reserves relates to hedging reserves held in respect of cashflow and net investment hedges, and the difference arising on consolidation of the new parent undertaking.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

FOR THE HALF YEAR ENDED 30 JUNE 2012

* The Special Reserve was created in 2007 by court order upon cancellation of the share premium and retained earnings. The Special Reserve is undistributable and restrictions exist over its use.

** Other reserves relates to hedging reserves held in respect of cashflow and net investment hedges, and the difference arising on consolidation of the new parent undertaking.

Notes to the Financial Statements

1. General information

The financial information included in this interim financial report for the half year ended 30 June 2012 does not constitute accounts prepared for the purposes of Article 105 of the Companies (Jersey) Law 1991. A copy of the Group's Annual Report and Accounts for the year ended 31 December 2011, which were prepared under IFRS as adopted by the EU and expanded to make reference to IFRIC interpretations, have been delivered to the Registrar of Companies in Jersey and include an unqualified auditors' report.

Copies of this interim report will be available from the offices of Cape plc, 47 Esplanade, St Helier, Jersey JE1 0BD and on the Group's website at www.capeplc.com, in addition to the paper version posted to shareholders. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

This condensed consolidated interim financial information was approved for issue on 30 August 2012.

The condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated balance sheet, condensed consolidated statement of changes in equity and condensed consolidated cash flow have been reviewed by the auditors and their report is included in this document.

2. Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 June 2012 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim financial reporting', as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2011.

The interim financial report has been prepared under the historical cost convention; as modified by the accounting for derivative financial instruments at fair value through profit or loss.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

2.1 Going concern basis

After making enquiries, the Directors have reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its consolidated interim financial statements.

2.2 Accounting policies

The same accounting policies and methods of computation are followed in the interim financial statements as the latest published audited accounts, with the exception of taxation, which has been calculated using an effective tax rate for the half year ended 30 June 2012. The Group's latest published audited accounts are available on the Group's website at www.capeplc.com.

There is no financial impact on this condensed consolidated financial report of the new standards, amendments and interpretations that are in issue and mandatory for the financial year end to 31 December 2012:

- Amendment to IFRS 7, Financial Instruments: Transfers of financial assets (effective 1 July 2011).

- Amendment to IFRS 1, on hyperinflation and fixed dates (effective 1 July 2011)

- Amendment to IAS 12, Income taxes on deferred tax (effective 1 January 2012)

The Group has decided not to early adopt any standards which are not yet effective, but available for early adoption.

2.3 Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were in line with those that applied to the consolidated financial statements for the year ended 31 December 2011. In addition, there is a contingent liability disclosed in note 15 surrounding uncertainty arising from a ruling by the Court of Appeal which held that Cape had a duty of care to a former employee of a former subsidiary company.

2.4 Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2)

- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the Group's liabilities that are measured at fair value at 30 June 2012:

The following table presents the Group's liabilities that are measured at fair value at 30 June 2011:

The following table presents the Group's liabilities that are measured at fair value at 31 December 2011:

In 2012 there were no significant changes in the business or economic circumstances that affect the fair value of the Group's financial liabilities.

2.5 Foreign exchange

The Group is exposed to foreign currency risk in two key currencies. The movements in exchange rates for these two currencies are detailed below:

3. Segment information

Management has determined the operating segments based on the reports reviewed by the Group Board (Chief Operating Decision Maker) that are used to make strategic decisions. The Board considers the business from a geographic perspective. The profit measure used by the Chief Operating Decision Maker in its review is total operating profit.