Cape confident of winning bids for large natural gas projects

The news came as the company, which has operations in Wakefield, reported a 14 per cent increase in 2010 annual profits to £69.1m.

The group’s chief executive Martin May said: “As we get into the second half, our business will tip-up on the back of two large projects that we’re bidding on. One is Gorgon in Australia and the other is in Papua New Guinea.”

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

Numis Securities analyst Sanjeev Bahl said in a note to clients: “We believe that Pacific Rim LNG contract awards have the potential to drive further upgrades.”

The company, which provides insulation services to liquefied natural gas terminals, also said it had secured 63 per cent of its 2011 revenue target of £705m.

Mr May said he plans to make small acquisitions for Cape’s power generation and industrial cleaning units in the first half of the year, and will look at acquiring companies with a turnover of less than £6m.

Cape, which counts EDF, BP and National Grid among its customers, also said it expects business from international markets to grow from mid 2011 to 2015, and expects to return to organic revenue growth in the second half of 2011.

The company, which resumed its dividend payment in 2010 after 10 years, said it would pay a final dividend of 8p, taking the annual dividend to 12p per share.

Revenues fell 0.8 per cent to £650.1m, hurt by lower-than-expected revenue generated in the Middle East and UK. Revenues from the Far East grew 87 per cent. Analysts were expecting pre-tax profits of around 61m on revenues of £655.74m.

Cape’s shares, which have gained 38 per cent since the company posted higher first-half results on September 8, closed up 14.5 per cent last night, up 59p at 466p.

Analysts at Evolution Securities said: “Strong growth in Far East/Pacific Rim has offset expected lower revenue in UK/Middle East.... The shares remain one of the most attractive in the sector in terms of valuation.”