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Ocean interims reduced to pounds 21m

OCEAN GROUP, the freight, distribution and environmental services group, registered a 10.3 per cent fall in pre-tax profits to pounds 20.8m in the six months to the end of June. The interim dividend was unchanged at 4.71p.

The downturn in the offshore oil market, particularly in the North Sea following cutbacks by oil majors, caused a drop in operating profits of oil support services. Nicholas Barber, chief executive, said there were no signs of improvement in demand nor, on the supply side, of boats being retired early.

The marine services division made operating profits of pounds 12.6m against pounds 15.1m on turnover marginally ahead at pounds 58.8m.

Ocean has been affected by the weakening dollar. The cost in the first half was pounds 500,000. If the exchange rate remains around dollars 2 to the pound, the cost in the second half will be pounds 1.5m.

Freight and distribution services proved resilient, making almost unchanged operating profits of pounds 10.5m. Pricing pressure reduced the contribution from airfreight forwarding and Panocean, the bulk liquid storage business, made a reduced contribution. The company is still in negotiations to sell Panocean to Royal Pakhoed.

McGregor Cory, the contract distribution business in the UK and on the Continent, did well, reflecting expanding business and a first-time contribution from a distribution centre in Warrington.

Environmental services made operating profits of pounds 1.6m against pounds 2.1m, although municipal services improved. The US environmental testing market remained depressed but Ocean cut its costs and improved margins.

Ian Wild of BZW has shaved pounds 1.5m off full-year profits forecast to pounds 43m, against pounds 52.9m last year, mainly because of the weaker dollar. The shares rose 2p to 189p.