28th Jun 2007 07:01
Cape PLC28 June 2007 28 June 2007 Cape PLC ("Cape" or the "Company") AGM Statement At the Company's AGM this morning, David McManus, Chairman of Cape PLC will makethe following statement. "Trading Having started 2007 with record levels of activity, I am pleased to report thatCape PLC, the international provider of essential support services to the energysector, has continued to enjoy strong trading conditions. Accordingly, theDirectors now believe that the Company's turnover and operating profit for theyear ending 31 December 2007 are likely to be materially ahead of current marketexpectations. So far this year we have announced a number of significant new contract wins,including: • a major new contract with John Wood Group PLC to perform fabric maintenance services for up to nine years as part of the £350 million Rejuvenation Project on the Shell St Fergus and Mossmorran Terminals in Scotland; • a £10 million maintenance contract renewal over five years with RWE Npower PLC at the Didcot A and B power stations; • a £7.5 million maintenance contract renewal over three years with RWE Npower PLC at Aberthaw power station; • seven other access, insulation and cleaning contracts in the UK with a combined value in excess of £27 million; • a large project, also in the UK, for two major players in the nuclear decommissioning field; • a US$8 million insulation contract in Qatar for Descon Engineering; and • a c. US$2.6 million insulation contract on six floating production, storage and offloading (FPSO)modules to be built for ConocoPhillips' Phase II development in the Bohai Sea off the north-east coast of China In addition, we are pleased to announce that in recent weeks: • DBI Industrial Services Limited, the industrial cleaning business acquired by Cape in October 2006, has been awarded a contract for the provision of site-wide drainage cleaning and CCTV survey at BP's Sullom Voe terminal. The contract is for three years with the option to renew for a further two years and is expected to be worth approximately £3 million over the full term; • in Qatar, Cape has been awarded two three year maintenance contract renewals with Qatar Petroleum on the Dhukan oilfield with a combined value of approximately US$9.5 million; and • in Singapore, Cape has been awarded a c.US$2.8 million access scaffolding contract with Foster Wheeler on the Lucite Alpha 1 Project Health and safety The heavy emphasis which Cape places on all aspects of health and safety meansthat during the first six months of 2007, Cape has completed three million manhours without a lost time incident on each of the Shell Malampaya Project in thePhilippines and on Sakhalin Island. Acquisitions On 5 June 2007, Cape completed the acquisition of Total Rope AccessInternational Limited, market leaders in the UK in using abseiling techniques toprovide non-destructive testing, inspection, fabric maintenance, insulation,painting and window cleaning services to major industrial clients. This was followed by the acquisition, on 21 June 2007, of Endecon Limited whichprovides environmentally safe systems to decontaminate oil refinery andpetrochemical systems minimising heavy, oily sludges and deposits in order toprovide Cape's clients with demonstrable safety and productivity benefits atplant shutdowns. Both Total Rope Access International Limited and Endecon Limited operate withinCape's core business sectors and their acquisition further enhances Cape'sability to provide a comprehensive package of industrial services to the energysector. Cape has also recently resumed discussions with PCH Group Limited ("PCH"). PCHis quoted on the Australian Stock Exchange. Its business is diversified across arange of industries, with services provided for construction and maintenanceactivities in the natural resources, residential and commercial propertysectors. It has operations in Australia, South-East Asia, UAE and the CaspianRegion. It reported revenues for the twelve months to 30 June 2006 of A$121million (£51 million). These discussions are at a preliminary stage and therecan be no certainty that agreement will be reached for a recommended offer forPCH. Capital reduction Cape will shortly be writing to shareholders and convening an EGM at which itwill seek their approval of a capital reduction. This is consistent with Cape'saim of returning to the ranks of companies paying an ordinary dividend in duecourse. In order for the Company to pay any dividend, it must have distributablereserves available for that purpose. Currently, the deficit on the profit andloss account of the Company precludes the payment of any dividend unless anduntil that deficit has been eliminated and profits available for the payment ofdividends have been credited to the profit and loss account of the Company. To that end, and to expedite the process of eliminating this deficit rather thanwaiting for its elimination in the ordinary course of profit generation, theBoard proposes to cancel the share premium account of the Company and credit tothe profit and loss account of the Company the amount required to eliminate thedeficit and permit future profits to be available for distribution whenappropriate and permissible. (The balance of the amount released by thecancellation of the share premium account will, for the time being, remainundistributable for the protection of creditors of the Company.) On the basisthat the Company continues to trade profitably it will then commence building acredit on the profit and loss account from the profits earned after thecancellation of the share premium account has become effective. Notwithstanding the effect of the proposed capital reduction, it may still besome time before the payment of dividends is resumed since the Board will haveto be satisfied both that profits are available for the purpose and that theCompany has complied fully with the provisions of the Scheme of Arrangement asregards the financing of Cape's Asbestos Fund. Full details of the proposed capital reduction will be contained in a circularto be sent to shareholders shortly." ENDS For further information, please contact:Cape PLCDavid McManus, ChairmanMartin May, Chief Executive +44 (0)1924 876 276 Bell Pottinger Corporate & FinancialNick Lambert / Victoria Geoghegan +44 (0)20 7861 3232 Collins Stewart Europe LimitedChris Wells/ Mark Connelly +44 (0)20 7523 8350 Notes to editors • Cape is the parent company of a number of service providing organizations operating primarily in the oil and gas, petrochemical and power generation industries • In the year to 31 December 2006, Cape reported turnover of £295.5 million • Cape currently employs c. 8,200 people in 23 countries worldwide • Cape specialises in the provision of scaffolding, insulation, fire protection, specialist cleaning and other essential services to major industrial clients in the energy sector • Cape's ability to provide specialist cleaning services was enhanced by the acquisition of DBI Group Limited in October 2006 • On 23 April 2007, Cape's shareholder's approved the placing of 26,923,077 ordinary shares at £2.60 per share to raise £70 million (before expenses) • On 6 June 2007, Cape acquired Total Rope Access International Limited • On 22 June 2007, Cape acquired Endecon Limited This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CIU.L