Companies: CIU   

Energy sector support services group Cape has cheered with new contract wins, worth more than £10m, in the buoyant Far East and Pacific Rim markets.

Chief executive Martin May says the Far East/Pacific Rim remains a key area of expansion for global player Cape, which provides everything from access scaffolding to fire protection and specialist cleaning for the assets of its energy and natural resources clientele.

Significantly, Cape scaled up its operations in the region last year via three Australian acquisitions, adding £125m of annualised sales to the group. The latest wave of deals for Cape include a further two contracts in Singapore, one involving insulation works for a Jurong Island project and the other the provision of ‘access and formwork’ for the construction of a residential tower. Elsewhere, in Australia, Cape has received a contract for the surface preparation and coating of large tanks.

May, the no-nonsense entrepreneur driving Cape forward, says the company ‘is now a major player in these key markets’ and is seeing the benefits of the ‘bundling’ of services to clients.

Calendar 2007 numbers were outstanding, showing pre-tax profits increased 111.5% to £33m, on 56.5% top-line growth to £429m, reflecting strong levels of organic growth. While year-end net debt was significant at £190.5m – a factor that might be weighing on the shares – Cape promises that debt levels will be reduced ‘by not less than £30m’ this year.

Increasingly diverse and expanding profitably, analysts see Cape’s profits hitting £44m this year, producing earnings of 28.4p. Recommended by Growth Company Investor at 223.5p earlier this year and trading on a forward earnings multiple of just eight times, the shares remain a buy.

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