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UPDATE 1-Cape expects margins to improve this year; shares jump
March 6, 2013 / 9:46 AM / 5 years ago

UPDATE 1-Cape expects margins to improve this year; shares jump

(Adds forecast, analyst quotes; updates share move)

By Ankur Banerjee

March 6 (Reuters) - Cape Plc, a provider of painting and insulation services to the mining and LNG industries, said it expects improved margins in 2013 and maintained its dividend despite a lower full-year profit, sending its shares up as much as 19 percent.

The stock was among the top percentage gainers on the London Stock Exchange on Wednesday, trading at levels last seen in November before Cape issued a profit warning.

“The key positive was that the full-year dividend was maintained,” Investec Bank analyst Stuart Joyner said.

Canaccord Genuity analyst Michael O‘Brien said there were no negative surprises in the results of the company, which cited issues in its Australian business and at an Algerian LNG project for its profit warning three months ago.

Cape’s adjusted pretax profit fell 66 percent to 23.8 million pounds ($36 million).

The company said, however, maintained its 14 pence per share dividend and said it was confident about the current year.

Adjusted operating margins shrank to 4.2 percent from 11.2 percent a year earlier. Cape did not provide a specific forecast for 2013 margins.

Adjusted revenue from continuing operations rose 7 percent to 749.4 million pounds, driven by construction projects in the Middle East.

Cape shares were up 16 percent at 270.25 pence at 0928 GMT. ($1 = 0.66 British pounds) (Reporting by Ankur Banerjee in Bangalore; Editing by Joyjeet Das)

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