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

News
peoplePaper attempts to defend itself
Voices
voicesWe desperately need men to be feminists too
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
PROMOTED VIDEO
Life and Style
tech
News
Mike Tyson has led an appalling and sad life, but are we not a country that gives second chances?
peopleFormer boxer 'watched over' crash victim until ambulance arrived
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
tv
News
i100
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Sport
John Terry, Frank Lampard
footballChelsea captain sends signed shirt to fan whose mum had died
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
News
i100
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
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

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits