Cammell profits steam up to pounds 4.7m

CAMMELL LAIRD, the one-time shipbuilder for Cunard that has survived as a ship repair and conversion specialist, made more profit in the six months to the end of October than in the whole of the previous year.

Turnover in the first half quadrupled to pounds 41.8m and profits more than trebled to pounds 4.7m, in spite of a pounds 500,000 charge for training costs included in the figures.

Cammell Laird Merseyside enjoyed a record six months on the back of strong demand from the off-shore oil and ferry markets. The strong performance continued into the third quarter, the forward workload is close to pounds 40m and the yards are operating at close to full capacity.

Much of the workload is related to the off-shore oil sector, but it is concentrated mainly on deep-water exploration work which is less susceptible to the drop in oil prices than shallow-water work or production from marginal fields.

Cammell has yet to show it can break into the really big-ticket work, but labour costs are 40 per cent lower than those of its continental competitors.

Juan Kelly, the chairman, said world trade was continuing to expand regardless of the economic climate, which had affected the rate of growth but had not halted it.

Cammell Laird Gibraltar's recent quality accreditation will allow it to expand its repair activities and refit cruise ships. The acquisition of Wear Dockyard and Tyne Dock Engineering came too late to have much effect on the figures, but should flow through to results by early summer.

Brokers yesterday upgraded forecasts for the current year to pounds 9.7m and earnings of 32.1p a share, although forecasts for the year after remain unchanged at pounds 15.4m and 42.7p a share in view of the difficulty of forecasting demand.

The shares fell 10p to 700p yesterday, but they have almost trebled over the past 12 months. At 17 times forecast earnings, however, they look expensive.

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