End of the line for Leith port

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FORTH Ports said yesterday it will eventually close down its Leith port as it outlined its strategy for long-term growth.

The company, which owns six Scottish ports including Grangemouth, and about one-third of Edinburgh’s waterfront regeneration project, confirmed it was in discussions with the city council over plans to redevelop 167 acres of Leith by 2020.

Chief executive Charles Hammond said: "This is a highly significant venture and a very exciting prospect. Existing ports customers will have to relocate, but that may be beneficial as ports such as Grangemouth and Rosyth have better access to motorways."

Pre-tax profits at Forth Ports before exceptionals came in at 48.6 million in 2003, up 12 per cent from of the previous year and slightly above market expectations. The group raised its dividend 10 per cent for the full year from 33p to 36.3p.

Hammond refused to quash speculation that the group was eyeing a 500m move for Teesport, in the north of England which could be put up for sale, adding that as an ambitious firm it would look at anything that came on the market for the right price.

Alastair Gunn, a transport and logistics analyst with Arbuthnot, said he was impressed with the numbers. He added that Leith was now a major asset for the company, describing it as "full of gems" and likely to grow in value.

Forth Ports revealed that its ports division, which accounts for about two-thirds of its revenues, saw profits rise 9 per cent despite a recent poor run in Scotland.

Hammond said that one of the two Rosyth-Zeebrugge ferries was being refitted, slowing traffic on the route, while a sluggish performance by pipe coating firm Bredero-Shaw had hampered progress at Leith.

He added: "Its nothing to be concerned about as the problems were all short term. We expect strong growth in 2004, mainly in the second half. For example, the investment climate in the North Sea is better than it was a year ago."

The performance of Tilbury - the group’s only English port - was described as "excellent", with a 15-year contract with Finnish paper group Stora Enso set to begin by July 2005.

The Leith redevelopment will come alongside the company’s 300m investment in Edinburgh’s Granton area.

Hammond said he hoped to lodge for planning permission for the group’s Waterfront Plaza development by the end of this year, but said the process could easily drag into 2005.

He added that Edinburgh City Council’s notoriously slow treatment of planning proposals would be boosted by new resources, a pledge Hammond said should lead to more staff.

He said: "The council realises how much development is being done on the Waterfront and has promised to provide more resources. The challenge for us is to speed up activity by being efficient about providing and processing information."

The group said its Ocean Terminal shopping centre was performing well in a difficult market, but would not break even before 2005 or 2006.

The company’s shares edged up 4p to 1130.5p.