Cape sees FY 'materially ahead' of expectations

Cape announced new contracts wins on Monday as it said it expects full-year results to be "materially ahead" of previous expectations following strong trading, although its view on 2018 was a little more cautious.

The company, which provides critical industrial services to the energy and natural resources sector, said its Australian subsidiary has secured a contract with JKC Australia for the provision of insulation and coatings services for the Ichthys Project Onshore LNG Facilities in Darwin, Australia. This initial contract is expected to begin in the second quarter of this year, with the majority of activity due to take place in the second half of the year.

In addition, Cape has secured two contracts to extend its longstanding relationship with BP in the UK North Sea for a further three years. These contracts have a combined estimated value in excess of £150 m. The contracts, which have been effective since the start of this year, secure 400 core jobs for Cape employees in the North Sea as its provides Storage tank services, industrial cleaning, heat exchanger, access, insulation and coating services, along with general operatives across BP's upstream and midstream assets.

The group also said that it continues to trade strongly and, with the additional benefit of the Ichthys award, it now expects the full year performance for 2017 to be materially ahead of its previous expectations.

"The board anticipates that 2018 will be a more challenging year, driven by the expected reduction in volume from the current high level of construction activity in Asia Pacific and the effect of project delays and margin pressures in the Middle East."

At 0850 BST, the shares were up 1.3% to 245.25p.