Cape celebrates return to big time

SUPPORT services group Cape made its return to the main market of the London Stock Exchange yesterday.

The group’s shares closed up 10p at 540p last night as the group celebrated its return to the FTSE index after eight years on the Alternative Investment Market.

Cape said the move was one of the largest transfers up to the main market in recent years.

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During its time on AIM, the group’s earnings per share increased by over 500 per cent, debt was slashed and dividends were resumed.

The company has moved from a UK focus, where it has operations in Doncaster, to a global one with a footprint spanning Far East/Pacific Rim, Middle East, Caspian and the UK. Cape said its current size means it should soon be placed in the mid ranking FTSE 250 index.

Chief executive Martin May said: “I am very proud to return Cape to the main market.

“Having delivered another set of record results, the business is in great shape.

“Looking forward to 2012 we are poised for another period of sustained growth as we enter a new up-cycle for our construction support services, particularly downstream Gulf/Middle East and gas/LNG in the Far East/Pacific Rim.”

He added that this situation would not have been possible without the rejuvenation of the Cape business, thanks to the efforts of the group’s 18,000 employees in 29 countries.

“Our people have earned a reputation for outstanding safety and on time delivery,” he added.

Cape is making progress on its plans to move its tax base to Singapore and Jersey.

The company now derives more than two-thirds of its profits from outside the UK and plans to establish a new UK-listed holding company abroad.

The group said it has incurred £3.5m in costs relating to the restructuring.

Of these, £2m stem from its move to the main market and shifting its tax base.

The remaining £1.5m covers a charge representing the group’s unamortised facility fees, following its early cancellation of its 2007 syndicated bank facility.

Cape signed a new £220m bank facility in January to provide “a strong financial platform and flexibility to support future growth”.

Cape provides services to the energy industry including access systems, insulation, painting, coatings, blasting, industrial cleaning and training.

It also assesses both industrial plant operators and major international engineering and construction companies.

Last month the group said it was trading in line with expectations with activity levels and operating margins since the start of the year in line with 2010.

Activity in the Commonwealth of Independent States, Mediterranean, North African, Far East and Pacific Rim regions was ahead of 2010, offsetting weaker activity levels in the Gulf and Middle East region.

The group said it continues to expect demand for its construction support services to start showing sustained growth from the summer onwards.

Cape said its order intake in the first four months of the year supports this belief, with contract wins in the Gulf/Middle East including extensive work on the Jubail Export Refinery, Ruwais Refinery 4th NGL train, Habshan 5 and Borouge III.

All these energy projects are expected to start in the final quarter of this year or early next year.

Cape added several major liquefied natural gas projects are due to start in the Far East and Pacific Rim region, adding to its belief in a rebound in demand for construction support services.

Construction on the two liquefied natural gas projects is scheduled to begin in 2012.

Over the next five years, the company said it expects business to be driven primarily from the Pacific Rim and Far East re- gions.

Cape has said business should pick up in the second half of 2011 on the back of the two LNG projects.

The company reported a 14 per cent increase in 2010 annual profits to £69.1m.