UK-based industrial services group Cape plc is planning to offload some of its Australian assets, including two divisions in Western Australia, after it took a $250 million-plus hit to its profit as a result of their poor performance.
Cape announced yesterday a pre-tax loss of £140.1 million ($205.45 million), a result it described as disappointing and largely driven by poor performances from its Australian operations and the Arzew project in Algeria.
The company took a a £128.1 million ($253 million) impairment charge after reviewing the carrying value of its Australian assets anda £44.5 million exceptional charge after discontinuing some of its operations.
Cape said it was planning to offload its Perth scaffolding operation which it created after acquiring Concept Hire for $101 million in 2007.
Cape also acquired Malaga-based scaffolding supplier PCH Group in 2007, for $247 million.
Cape will also sell its blasting and painting facility in Kwinana, formerly known as Total Corrosion Control, which it acquired for $85 million, also in 2007.
It will also sell its scaffolding operations in Melbourne.
“The Australian market continues to be subdued in the short term, with the timing of the contracting on the major new LNG trains being pushed out and capital expenditure by the mining sector remaining restricted,” Cape said in a statement.
“During the year we saw some clients elect to self-deliver their access equipment for major new projects, which has had the effect of reducing the size of the accessible market.
“Nevertheless, there remains a substantial opportunity in the Australian market to provide project management and delivery capability for those clients that have chosen the self-delivery model and the business remains confident that the accessible market is expected to grow strongly in the medium-term.”