Algeria and Oz continue to weigh on Cape

SUPPORT services provider Cape yesterday showed no sign of moving on from a difficult 2012 as it posted a 60 per cent drop in full-year adjusted operating profit.

The company issued a profit warning in November – following two others last year – prompting the departure of its chief financial officer. It was struggling with slow progress at a project in Algeria, and worsening margins at its Australian business.

Adjusted operating profit over the year was logged at £31.5m – from £77.9m in 2011 – on revenues seven per cent higher at £749.4m.

The Arzew Project in Algeria and its Australian businesses – which Cape warned about in November – continued to weigh on performance in 2012, although the FTSE 250 firm has now conducted a root and branch review of its balance sheet.

Despite the poor end to the year, chief executive Joe Oatley – who was hired last May – was confident of further progress this year.

“This focus on operational excellence should deliver much improved margins in 2013 and with a range of growth opportunities for 2014 and beyond I look forward to the future with confidence,” he said.

Shares soared yesterday to close up 11.16 per cent at 259p.