P&O Princess sails ahead with a 7% profits leap

Published on Thursday 24 October 2002 01:00

CRUISE operator P&O Princess, which is at the centre of a takeover tussle between market leader Carnival and rival US firm Royal Caribbean, today posted a seven per cent rise in third-quarter profits.

The group, which owns the ship used in the television programme The Love Boat, said pre-tax profits for the three months to the end of September came to 119 million, up from 110.8m for the same period last year and at the top end of analysts’ forecasts. The world’s three biggest cruise lines have been locked in a bid battle since the end of last year, when they rushed to make cost-cutting alliances to counter a slump in business following the September 11 attacks on the United States.

P&O Princess has consistently favoured a nil-premium merger with Royal Caribbean over a hostile all-share bid from Carnival which is currently worth around 3.5 billion, or 505p per share. But when US regulators cleared both competing deals earlier this month, P&O Princess agreed to talks with Carnival for the first time.

However, analysts warn that time is running out. Under its agreement with Royal Caribbean, P&O Princess has to hold an extraordinary general meeting to vote on that deal by November 16.