SHARES in industrial services provider Cape soared by 19.42 per cent yesterday, despite its first half profit slumping by 70 per cent.
Despite the sharp dip in profits, the firm said it is on track to meet its full-year targets, sending the shares up. The rise also came as several brokers issued “buy” notes on the stock.
Broker WH Ireland noted that the shares remain undervalued, while Sanjeev Bahl at Numis said that Cape was “back on track”. Craig Howie at Shore Capital stayed neutral and maintained a “hold” recommendation, saying that shares in Cape remain cheap for a reason.
Cape, which provides mechanical support services to the energy sector, said the profit slump was impacted by the ongoing issues at its Arzew project in Algeria, and lower margins in Australia.
Its forward order book stood at £920m, up from £830m over the same period last year.
In May Cape, which earlier this year issued two profit warnings, shouldered a £14m charge relating to the Arzew project.
Shares closed at 230p.