Christian Salvesen’s pre-close trading statement
Overall, the outcome for the year ended 31st March 2007 is expected to be in-line with market expectations. A third consecutive year of strong contract wins has delivered revenue growth of around 10 pct in the second half of the financial year, following the 7.5 pct reported in the first half, and all businesses have grown. Contract wins are ahead of last year’s GBP 120 million, with high contract retention rates and a continuing strong pipeline.
In the Food & Consumer sector, results will reflect the strong performance in our UK businesses and a stabilising performance in mainland Europe.
In the Transport sector, results will reflect the continuing challenges in the UK market. We have commenced a thorough review of this business which will be completed by the end of May.
We recently concluded a strategic alliance with leading Turkish freight forwarder, Ulustrans, to offer integrated transportation services between Turkey and the rest of Europe. The alliance will combine Ulustrans’ established freight forwarding services with Christian Salvesen’s extensive networks in Europe.
The programme of restructuring to improve efficiency across the Group is continuing, with particular focus on our UK and Spanish transport businesses and the European food & consumer business, and will result in restructuring costs of around GBP 4.5 million in the second half of the year just ended.
We have recently agreed some important changes with the trustees of our UK pension scheme which have reduced both the ongoing P&L cost and the balance sheet deficit without the need for additional cash contributions.
The year end debt position will be around GBP 45 million, following the successful sale and leaseback of part of our UK property portfolio in September 2006. That transaction generated GBP 47 million in cash for property with a book value of GBP 19 million. Following that transaction, the book value of our remaining properties was GBP 48 million net of related indebtedness.
