Forth Ports home and dry as container volumes recover

Published on Thursday 20 December 2007 20:29

FORTH Ports saw its shares move higher yesterday as it reported a "significant" improvement in trading at its ports arm and welcomed the announcement of a new Forth crossing.

The firm, which operates five ports in Scotland – including those at Grangemouth and Leith, told investors its results for the year to the end of December would be in line with expectations.

Shares touched a high of 1,899p following the bullish trading statement, closing the day at 1,888p, a rise of 25p or 1.5 per cent.

Edinburgh-based Forth said it had seen a recovery in container volumes at its Scottish ports in the second half of 2007, with coal volumes at Leith continuing to push ahead of last year's figures.

The 2012 Olympics in London are set to bolster trading for Forth, particularly at its Tilbury port on the River Thames, where the firm is dealing with growing demand for the supply of materials to the Olympics site, which will use its new barge terminal.

A growth in agriculture-related traffic and the export of Scottish produce such as whisky are likely to help lift the ports business to "steady growth" over the coming year, chief executive Charles Hammond told The Scotsman.

He added that the construction of a new Forth road bridge could also prove lucrative for the firm.

"We would like to think that a new bridge would be a boost for us," Hammond said. "We have the capability to stockpile the distribution of materials, as we are doing for the Olympics in Tilbury."

He added that the group continued to talk to Stagecoach about the possibility of ferry services over the Firth of Forth.

Forth added that the integration of the Nordic Group – which boasts a port at Chatham in Kent – was progressing well, saying trading in the second half of this year is in line with expectations laid out at the time of January's 46 million takeover deal.

Hammond said: "We are delighted with the way the acquisition has integrated and we are seeing the scope for it to grow again considerably in the coming year."

The company, which is in discussions with City of Edinburgh Council over a planning application for the regeneration of Leith Docks, said the development was progressing well.

Hammond added: "It is the largest planning application the city council has ever seen and because of that, it is likely to be sent to the Scottish Government, which could take another couple of years."

He confirmed that Forth had recently sold off a second affordable-housing site at Western Harbour, Edinburgh.

Investec Securities maintained its forecasts following yesterday's update, with profits expected to be 27.1m against 30.4m the previous year.

The broker said the ports division was helped by a high level of secured revenues, with an estimated 80 per cent of business known about at least five years ahead.

Investec analyst John Lawson said: "The property planning process remains on track, although as expected the division will not generate much profit for several years."