P&O disposal plan to raise pounds 2bn

P&O YESTERDAY surprised the City with plans to raise over pounds 2bn from the disposal of its construction, property, exhibitions and containers divisions in order to focus on its cruises, ferries and ports businesses.

The radical programme will see the disappearance of over pounds 2.5bn of the transport group's pounds 5.9bn turnover, through the flotation of its Bovis construction arm, the P&O Nedlloyd containers joint venture, and the sale of its US and UK properties, including the Olympia exhibition centre in London's Earls Court.

News of the changes came after P&O reported a 14 per cent increase in underlying profits to pounds 415.9m and raised its dividend for the first time this decade.

Lord Sterling, the P&O chairman, said the disposals would bring P&O back to its seaborne heritage and that it could pave the way for a secondary listing in New York. "[Ferries,cruises and ports] will be the engine rooms of this company to drive it into the future," he said.

Lord Sterling said the proceeds of the sales would be used to pay debts and to boost investment in the P&O Stena Line cross channel ferry joint venture, and in the Princess and P&O cruise lines.

Shares in the group soared 5.5 per cent to 860.5p as City analysts welcomed the demise of P&O's conglomerate-like structure. Even though investors had been calling for disposals for some time, few expected such a radical programme. The bulk of the funds, around pounds 1.5bn, will come from the sale of P&O's retail and office properties in Britain and the US. The group said the portfolio could be sold in chunks or as a single company.

The flotation of Bovis Construction, set to be completed within a year, could raise up to pounds 350m, while the listing of the container venture could netpounds 300m. Olympia would probably be sold for about pounds 200m.

Meanwhile, Lord Sterling promised to bring back 50 ships to the UK flag - including the Grand Princess, the world's biggest cruise ship - if the Government introduced a tonnage tax. The levy, currently being considered by the Treasury, would result in lower rates for companies with large ships.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions