Lord Sterling, chairman, said the results, which were at the upper end of City expectations, confirmed that P&O had begun to reap the benefit of the large investment it made in its international businesses through the recession.
He warned that P&O would fight hard to maintain profits from its ferries division when the Channel tunnel opened, but accepted that there was no prospect of the Government allowing a merger between P&O Ferries and Sealink until Eurotunnel was fully operational.
The ferries division was one of the best performers in the group, boosting its operating profits to pounds 81.7m. But the overall results included a pounds 15m provision for further rationalisation in ferries, taking the group headline profits figure down to pounds 245.2m.
Profits at the pre-tax level were pounds 523.7m after pounds 278.5m exceptional profits on the sale of Sutcliffe Catering and other fixed assets.
Bovis Construction returned to the black, turning in a pounds 10.3m profit after losses of pounds 3.2m in 1992. Lord Sterling also announced yesterday that Bovis had won the management contract for Expo '98 in Lisbon, believed to be worth pounds 1bn.
Clive Anderson, analyst at Smith New Court, said: 'What you have in P&O is a number of cyclical businesses, all either benefiting from economic upturn or poised to do so.' The dividend is held at 30.5p.
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