Cape sees 2011 as watershed year for growth

Cape, which has its UK operations based in Wakefield, said full-year adjusted pre-tax profits rose 26 per cent in 2009 thanks to contract wins in the Middle East and better than expected cost savings.

Cape, which provides insulation, industrial cleaning and training services to the energy and mineral resources sectors, said adjusted profits rose 26 per cent to 60.7m in the year to December 31.

Without adjustments, the group posted a pre-tax loss of 15.6m after booking a provision of 70.5m to enable it to draw a line under its asbestos liabilities.

The company, whose customers include EDF, BP and National Grid, has benefited from the defensive nature of its maintenance business, which accounts for 48 per cent of revenues.

Cape said it expects levels of activity to be the same in 2010 as in 2009, but it anticipates a return to higher growth in 2011, with demand for its services benefiting from ageing infrastructure in the UK and high growth in markets in the Middle East and Far East.

The company will look to restart dividend payments later this year, after last paying a dividend to shareholders 10 years ago.

The group's results were boosted by a number of significant new and renewed contracts in the Middle East worth 22m in total.

All the contracts are in Qatar and are associated with the country's burgeoning gas export business.

The biggest deal is a 13.5m fully integrated multi-discipline maintenance contract to supply access, insulation, fireproofing, refractory, painting and general civil work to Qatargas's onshore and offshore facilities.

This contract began last June and will last for three years. There is also a provision within the contract for a two-year extension through to the middle of 2014.

Cape also won a 5.5m multi-discipline contract to supply access and insulation works on the ORYX Gas to Liquids plant in Qatar. The contract will last for three years.

ORYX Gas To Liquids operation is a joint venture between Qatar Petroleum and Sasol of South Africa. Cape has been commissioned to work on the first of a series of planned Gas To Liquids production facilities contributing to the State of Qatar's stated ambition of becoming the Gas To Liquids "capital of the world".

The third contract is worth around 3m and is a multi-discipline contract to supply access and insulation works for the Tank construction on the Shell Pearl Gas To Liquids plant within Qatar.

The Pearl plant will be the world's largest plant converting natural gas into 140,000 barrels per day of clean-burning liquid transport fuel and other products.

The project will also produce 120,000 barrels of oil equivalent per day of natural gas liquids and ethane.

Cape's chief executive Martin May said: "These contracts demonstrate the value to clients of Cape's bundled services proposition and our strength across our international footprint."

In January the group announced a 150m five-year contract with BP to work on all nine of the energy company's North Sea oil platforms.

Cape will provide fabric maintenance support and deck operations on the platforms together with onshore maintenance at BP's Dimlington Gas Terminal.

Cape already provides these services to BP at six of its UK North Sea oil platforms.

Bernard Looney, managing director of BP North Sea, said: "Cape has demonstrated its capability to deliver the services we need safely and efficiently and we look forward to a continued productive partnership."

Since the year end Cape has also won 6m in new contracts with oil giant Shell.

The growth of a company

Since its foundation over a century ago, Cape has had a varied and colourful history.

The Cape Group was founded in 1893 as an importer and manufacturer of insulation products.

Between 1893 and the 1950s, the company grew rapidly. It acquired its first factory in the UK in 1896 and at the start of the Second World War in 1939 manufacturing began at Acre Mill in West Yorkshire

In 1976 the group started its scaffolding division.

In 1979 it pulled out of its mining operations in South Africa and in 1982 it stopped manufacture of asbestos products. In 2006 it created a 40m asbestos fund for UK claimants. In 2007, Cape developed a significant presence in Australia.