11th May 2016 08:41
LONDON (Alliance News) - Cape PLC, which provides support services to the energy and natural resources sectors, on Wednesday said margins were lower than expected in the first quarter, with "solid" order intake and revenue.
In a statement, the company said its expectations for the full year remain unchanged, with a "higher-than-usual weighting of earnings in the second half as the weaker first quarter is offset by increasing levels of activity during the year and the continuing benefit of current favourable foreign exchange rates."
Cape expects to announce its results for the half year ending 3 July 2016 on 23 August 2016.
Its order book as of March 31 was GBP862 million, slightly higher than the GBP861 million reported three months earlier. Cape said revenue developed "positively" thanks to favourable foreign exchange rate movements and a faster-than-expected ramp up on the Wheatstone project in Australia. Operating profit was below expectations due to the pressure on margins, Cape said.
"Downward pressure on margins in the UK was largely driven by costs at the Fawley site continuing to run at a level higher than expected and lower utilisation of our specialist services in the North Sea. MENA margins were adversely impacted by delays in project initiation in Oman and pricing pressures in the UAE and Qatar," Cape said.
"The KSA business has continued to perform strongly, with both volume and margin higher than expectations. The Asia Pacific business benefited from a significant ramp up in revenues at Wheatstone which partly offset the adverse effect of project demobilisation costs and reduced volumes across many of the Asian businesses," the company said. KSA is Kingdom of Saudi Arabia.
Cape expects to announce its results for the half year ending July 3 on August 23.
Shares in Cape were down 3.3% at 210.75 pence on Wednesday morning.
By Samuel Agini; [email protected]; @samuelagini
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