AGM Statement

10 May 2017

Cape plc
("Cape" or “the Company”, and together with its subsidiaries, the "Group")

AGM Statement

 

Cape plc (CIU.LN), an international leader in the provision of critical industrial services to the energy and natural resources sectors, today issues the following AGM Statement, incorporating the first quarter’s results from 1 January 2017 to 2 April 2017.

 

Trading for the first quarter of 2017

As expected, the Group delivered a strong trading performance in the first quarter, largely driven by increased project volumes and excellent operational performance in the Asia Pacific region. The Group order book at the end of the first quarter was £797m (31 December 2016: £918m) with the reduction from the prior year-end being largely driven by the timing of key contract awards. The Group anticipates securing a number of significant prospects in the second quarter of 2017.

Overall, Group operating margins were in line with expectations with the robust performance in Asia Pacific offsetting lower margins in the Middle East, where, as expected, the business experienced increased pricing pressure. UK margins were in line with expectations.

 

Outlook

The UK North Sea and coal power generation sectors continue to be challenging, with reducing demand and increasing pricing pressures, while the general industrial and downstream sectors remain solid. Despite these mixed market conditions, the UK business is expected to deliver improved margins compared to the prior year due to a combination of improved contract performance and the benefit of the restructuring carried out in 2016.

As previously highlighted, market conditions in the Middle East region are challenging with a number of new projects being deferred and increasing pricing pressure. Nonetheless, bidding activity remains high and the business is expected to deliver a solid performance in 2017, largely driven by increasing volume on existing projects in the Kingdom of Saudi Arabia and Kuwait.

As previously disclosed, activity levels in the LNG sector in the Asia Pacific region are expected to be materially higher in the first half of the year, leading to a strong first half weighting to earnings for the region in 2017. The business continues to target project activity across the region to mitigate the effect of the expected volume reduction in the second half of the year.

The Board’s expectation for the Group’s full year performance remains unchanged, with, as anticipated, the balance of earnings weighted toward the first half.

Cape expects to announce its results for the half year ending 2 July 2017 on 22 August 2017.

 

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Enquiries

Cape plc                                                    +44 (0) 1895 459 979
Joe Oatley, Chief Executive
Michael Speakman, Chief Financial Officer
Ian Wood, Head of Investor Relations

 

Buchanan                                                     +44 (0) 207 466 5000
Bobby Morse, Ben Romney, Chris Judd

This announcement contains inside information.

 

Forward-looking statements

Certain statements in this document are forward looking. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that may or may not occur and could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Such risks, uncertainties or assumptions could adversely affect the outcome and financial effects of the expectations, beliefs, hopes, plans, intentions, strategies and events described herein. Therefore, forward-looking statements contained in this document regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which are based on the knowledge and information available only at the date of this document’s preparation. For a description of certain factors that may affect Cape’s business, financial performance or results of operations, please refer to the Principal risks on page 34 of the 2016 Annual Report and Accounts.

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, insulation, engineering and specialist coatings and fireproofing, environmental services, heat exchanger replacement and refurbishment, storage tanks and refractory. In 2016, Cape employed c.16,100 people working across 23 countries and reported revenue of £863.5 million.

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