Higher tonnages lift Mersey: Results strengthen Liverpool port group's hand in takeover campaign for Medway

Click to follow
The Independent Online
SHARES in Mersey Docks and Harbour Company, which owns the Port of Liverpool, rose after a strong profits performance at half-way led analysts to raise full-year forecasts.

The company, currently in takeover talks with Medway Ports, saw interim pre-tax profits to 30 June rise 16 per cent to pounds 8.9m on the back of improvements in most areas of trade handled by the port.

The positive performance will strengthen the company's hand in the controversial three-way battle for Medway, owner of Chatham and Sheerness docks, which has been valued at up to pounds 100m.

Mersey's turnover rose 7 per cent to pounds 45m, and earnings increased 17.3 per cent to 9.53p. The dividend was raised 14 per cent to 2.85p. Bill Slater, chairman, who is well known for his caution, described the figures as a 'very satisfactory performance in an uncertain economic climate'.

Tonnage handled by the Port of Liverpool, the company's core activity, rose by almost 5 per cent to 13.6 million tonnes and has trebled in less than 10 years. The figures also reflect an initial contribution from the pounds 14m acquisition in early June of a 50 per cent share in Merchant Ferries, an operator on North Sea routes.

There is no contribution from property activities, but the first units of Mersey's Tower Quays business park are let, and planning permission has been granted for an office and hotel development. The second half will see a bulk industrial zone at Birkenhead come on stream, and PowerGen's Gladstone Dock bulk terminal will become operational.

Mersey said little about the sale of Medway Ports, which has sparked allegations that former employees will lose millions of pounds because they had to sell their shares in June at a price significantly below what they are now worth.

Medway announced plans for a flotation in July, but this is now on hold while talks are held with Mersey. Forth Ports and Powell Duffryn are also interested.

Medway is thought to be making pre-tax profits of about pounds 10m, and had a flotation price of at least pounds 70m to pounds 80m. With Mersey having a market worth of less than pounds 250m, some form of equity issue is likely to accompany any takeover.

Mersey shares jumped 11p to 383p before finishing at 378p as analysts raised expectations for full-year profits by about pounds 1m to pounds 19m.

Comments