AB Ports pledges to commit £1bn to development scheme

Associated British Ports Holdings said yesterday that it plans to invest almost £1bn over the next 10 years on a series of port development projects.

The group made the pledge as it reported better-than-expected figures for the six months to 30 June with pre-tax profits down 1 per cent to £66.6m. The biggest proposed project is at Dibden Bay, near Southampton, where the company plans to spend up to £600m on a new deep-sea container site although opposition from environmental groups has jeopardised its prospects.

The Government will deliver its verdict on Dibden Bay either late this year or early next year but with a shortfall in capacity estimated at 10m container units by 2015, the Government is under pressure to expand Britain's port capabilities.

Bo Lerenius, the chief executive, was hopeful that the "sound arguments" the group had put forward regarding the Dibden Bay project would lead to approval being granted. The development would also offer the company "big growth potential" at comparatively low risk.

However a spokesperson for the government's environmental conservation agency, English Nature, stated that the project was unlikely to receive backing from them. With their crucial backing already secured by two rival developments at London Gateway on the Thames and Bathside near Harwich, ABP may need to revisit its environmental plans for the project.

The underlying growth in the company's core ports business saw ABP's shares close 11.25p higher at 421.25p yesterday following the announcement and left the company on target to meet market expectations of £138m pre-tax profit for the full year.

ABP, which owns approximately one-quarter of Britain's ports, including Southampton and Immingham, said that the drop in profits had resulted from delays to property sales which should filter into the second-half results.

Analysts at Credit Agricole Indosuez Cheuvreux noted that the Dibden Bay and Humber plans were "crucial next steps" for the company to escape its present rating band.

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