Deal with oil giant keeps profits growing at Cape

ENERGY services group Cape has won £6m in new contracts with oil giant Shell.

Cape, which has its UK operations based in Wakefield, has been awarded the additional contracts with Shell Philippines Exploration.

Cape will work on the Shell Malampaya 2010 shutdown, which will take place in the first quarter of 2010.

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The group will provide a number of services including access, insulation, protective coating systems, rigging and specialist skills including mercury handling, nitrogen purging and flushing, and pressure and leak testing.

Cape chief executive Martin May said: "We has been actively engaged on the Shell Malampaya Offshore and Onshore assets in the Philippines for 10 years and we are delighted to be appointed to carry out our third shutdown.

"Cape is uniquely placed to provide such an extensive range of diverse and complex services."

Cape is due to report results for the year to December 31 on March 10. The group reported strong trading in its second half and said it expects full year results to be "at least in line" with market forecasts.

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The company, which provides maintenance services to energy and mining companies, said cash generation has been strong and it expects to reduce debt to about 115m by the end of the year, nine per cent ahead of market estimates.

Cape is expected to report a pre-tax profit of 60m in the year to December 31. In September, the group reported an 85 per cent leap in half-year profits and strong growth in its order book.

Cape said pre-tax profits in the six months to June 30 had grown from 14.7m to 27.2m.

The company said it had benefited from exchange rate movements and cost reductions.

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Last week, the Ministry of Defence awarded a 105m contract to Ship Support Services, a joint venture between Wakefield-based Cape and Pyeroy in Gateshead. The contract was part of a 330m award for two Royal Navy aircraft carriers.

The new Queen Elizabeth Class carriers, which will be the largest and most powerful warships ever to be built in Britain, have suffered a series of delays, and a revised cost schedule is awaiting Treasury approval.

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