Profits slip but Forth Ports upbeat on outlook

Published on Tuesday 11 September 2007 01:03

FORTH Ports shares fell sharply yesterday on news its interim profits slipped, despite strength in its port operation division.

Pre-tax profits for the six months to 30 June fell 7 per cent to 12 million, driven down by its decision to cease disposals from its property division.

Its property arm plans to develop excess land in Leith into residential and commercial space, but it recorded an operating loss of 500,000 compared with a profit of 2m last year.

Chief executive Charles Hammond repeated comments made when the company issued its full-year results, that sales would largely cease for several years as Forth took a long-term approach to developing the land.

This month Forth Ports submitted a planning application to develop Leith Port in Edinburgh, which included almost 16,000 new homes, 100,000sq m of office space and 77,000sq m for retail.

Hammond said the development would create more than 11,000 jobs.

Forth Ports shares fell 50p or 2.7 per cent to 1,775p yesterday, despite Hammond saying he was comfortable with the market's expectations for the full year. The company is forecast to make a profit of 28.7m for the full year.

The results were largely in line with expectations and the company gave a positive outlook for the port operations business.

Hammond said the company's only English port, Tilbury on the Thames, increased tonnage by 10 per cent to 4.1 million tonnes, and enquiries were increasing for using the facility as a distribution centre for the 2012 Olympics. At its six Scottish ports tonnage was similar to last year's 6.5 million tonnes, though Hammond said the outlook was strong.

In June Forth Ports acquired Nordic Ltd for about 46.2m and Hammond said its integration would be a key priority for the second half. He declined to estimate the amount of savings that could be made for the business, claiming the focus was on growth, citing a possible expansion of its materials recycling business to other ports.

The company also drew the market's attention to its focus on the Baltic area, where it is seeking an acquisition.

Asked if an announcement was imminent, Hammond said the company was simply "assessing its options" on an area where container movement capacity was low and volumes were expected to grow.