24 Nov 2015 07:00
24 November 2015
Cape plc
("Cape" or the "Group")
Trading update
Cape plc, the international provider of critical industrial services to the energy and natural resources sectors, today issues the following trading update for the period 6 July 2015 to 1 November 2015.
Trading and market conditions
The Group has delivered a trading result for the period broadly in line with the Board's expectations, despite challenging market conditions. This has been driven by a relatively strong performance from the onshore UK and Australian businesses and lower than expected central costs, offsetting weakness in the offshore UK business and lower margins in the MENA business.
Within the UK, Europe & CIS region the business has experienced weakening demand from the UK offshore sector resulting in reduced volumes and continued pressure on pricing. Activity from the downstream and general industrial market in the UK remains robust. Project and maintenance volume in Azerbaijan continues to be strong.
Both project and maintenance volume in MENA remains solid for the region as a whole, although the business has seen some shutdown and project work delayed from the second half of 2015 into 2016. Project activity continues to be largely driven by the Kingdom of Saudi Arabia, with construction projects in Kuwait also now starting to move forward. During the last quarter, the MENA business has seen clients place an increasing focus on cost, with a resultant increase in pricing pressure across the region.
Asia Pacific markets remain mixed, with LNG project activity in Australia continuing to increase, offsetting weakness from the mining sector. Project demand in Asia has remained at similar levels throughout the year and is anticipated to slow down in 2016 due to the timing of project completions before increasing in 2017, largely driven by project activity in Malaysia.
Outlook
The Board is confident that the business is on track to deliver earnings per share in line with expectations for the year ending 31 December 2015.
Current market conditions are expected to persist through 2016. The Group's strategy of having a balanced business across geographies and sectors, with an increasing proportion of maintenance work, provides some protection against the effect of the lower oil price. The long term fundamental demand for the Group's services remains strong despite the challenges presented by the current market conditions. The Group is continuing to invest in developing its growth opportunities, whilst ensuring it has an appropriate cost base to match activity levels in each of its regions.
Cape expects to announce its results for the full year ending 31 December 2015 on 16 March 2016.
The Company will be hosting a site visit on 26 November for analysts and investors at SABIC Teesside at which no new trading information will be disclosed.
Enquiries:
Cape plc
Joe Oatley, Chief Executive +44 (0) 1895 459 979
Michael Speakman, CFO +44 (0) 1895 459 979
Buchanan +44 (0) 207 466 5000
Bobby Morse, Ben Romney, Helen Chan
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 financial 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 (www.capeplc.com), which is premium listed on the main market of the London Stock Exchange, is an international leader in the provision of critical industrial services principally to the energy and natural resources sectors. Our multi-disciplinary service offering includes access systems, insulation, specialist coatings, passive fire protection, refractory linings, environmental services, oil and gas storage tanks and heat exchanger replacement and refurbishment. Cape employs over 17,000 people working across 21 countries and in 2014 reported revenue of £698.3 million.