Far East proving a source of energy for Cape

Cape, which has its UK operations based in Wakefield, said activity levels in the Far East and Pacific Rim region are "materially ahead" of 2009, offsetting lower activity in the Gulf and Middle East.

Cape, which provides insulation, industrial cleaning and training services to the energy and mineral resources sectors, told shareholders at its Annual General Meeting yesterday that both activity levels and operating margins are level with a year ago.

Chief executive Martin May said: "Cape has made a solid start to the year. With project cycles varying from region to region, the benefit of our scale and leading positions across our international footprint has again been evident."

He said that plant safety is of primary importance for the group's customers.

"With Cape's best in industry safety programmes already recognised with several prestigious awards this year, this continues to set us apart from the competition."

Cape, which is listed on AIM, is thought to be considering a move to the main market.

Analyst Adrian Kearsey at Evolution said: "We feel that Cape shares are cheap and have the potential for material upside. A probable catalyst would be further news regarding a move to the full list."

Cape is predicting a return to higher growth in 2011 after a year of stability in 2010.

The group said full-year adjusted pre-tax profits rose 26 per cent in 2009 thanks to better than expected cost savings.

Cape 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 fact that the group has made a full provision for its asbestos liabilities has led analysts to believe the company is gearing up for a move to the main market.

Cape, 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.

The group 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 Far East.

The company will look to restart dividend payments later this year, after last paying a dividend to shareholders 10 years ago. This is seen as another sign that the group is putting its house in order ahead of a move to the main list.

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

In the year to December 31, Cape reported revenues of 655.1m. The group employs over 17,000 people in 28 countries and said it safely delivered over 41 million man hours in 2009.

The 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.

Group secures bp contract

Cape has won a prestigious 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.

It said this contract would add an additional three assets in the Clair, ETAP and Andrew platforms, as well as the Dimlington Gas Terminal.

Cape's chief executive Martin May said: "We are delighted to develop our services to BP by expanding our provision of safe, cost-effective and innovative services across BP's entire UK offshore operation."