The Investment Column: Cammell on acquisition alert

CAMMELL LAIRD, the marine services company which takes its name from the Cammell Laird shipyard it acquired in 1993, was floated two years ago at pounds 1. It has since steadily soared up to 855p as the market has got used to the idea that it is not a struggling shipbuilder. The market now recognises that Laird is not just a ship repairer either, but a sophisticated services business. Does this mean that the shares will stall?

Last year the group enjoyed spectacular growth in sales, which more than trebled. That followed the acquisition of facilities in the North-east and a full year's contribution from a shipyard leased from the government of Gibraltar.

The renovation of dry docks in Birkenhead added to the momentum. But Laird is stuck when it comes to delivering organic growth.

The success of the acquisitions indicates Laird's skill in identifying cheap assets to which it can apply its expertise. It does not build ships, but is able to snap up redundant ship yards which provide facilities for repair and refurbishment. Both activities are growing markets, and Laird aims to command competitive advantage in both by offering customers complete solutions. It already has the advantage that, by virtue of its UK location, it has inherited low-cost skilled labour and assets.

In repair, Laird's Gibraltar operations benefit from the deep-water oil exploration taking place off the West coast of Africa. In refurbishment, the group expects to receive further orders following the satisfaction of Airtours with a recent cruise ship re-fit. Meanwhile, as the British population ages, the cruise holiday business is expected to grow.

Marine services are a highly fragmented market, and in each of its markets, from defence to cruise ships, Laird faces competition. But it is unique in the range of markets it is exposed too. That insulates it from downturns in any one. This year's record was achieved against a background of crisis in the oil industry.

Laird is now on the lookout for acquisitions to enable it to meet its customers' needs with greater flexibility.

It aims to be able to either supply, source, design or re-fit ships as required. Given its track record in turning around moribund assets, shareholders can be confident that Laird will not be reckless.

Analysts expect pre-tax profits of pounds 15.3m this year and earnings of 40.7p per share, rising to pounds 18.2m and 47.8p. The shares, which closed up 12.5p at 855p, are near their recent all-time high of 860p. On a forward p/e of 21. That's still a discount to the market and given the transparency of Laird's forthcoming earnings growth, unjustified. Laird will lead consolidation in its industry and the shares are undervalued

Start your day with The Independent, sign up for daily news emails
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

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own