Salvesen half year results

Christian Salvesen PLC, the European logistics group,
reported a 17.4 pct fall in underlying pretax profit, blaming its German and
Spanish operations, where the downturn in the industrial market place combined
with the ongoing impact of the sharp rise in fuel prices a year ago, has
resulted in poor performances.
But the group said that as its mainland European operations are aligned more
closely with the UK model, it is increasingly well positioned to weather the
current economic uncertainties and take advantage of any upturn.
For the six months to Sept 30, Christian Salvesen reported a pretax profit
before exceptional items and goodwill amortisation of 17.1 mln stg, down 17.4
pct versus last year. Pretax profit was 17.2 mln stg versus 13.6 mln.
Total turnover was up 17.8 pct to 411.2 mln stg, reflecting new
acquisitions. Free cash generation was up from 2.6 mln stg to 20.7 mln,
including asset disposals.
The interim dividend was maintained at 2.65 pence, underpinned by strong
cash flow.
Christian Salvesen said new management teams have been appointed in both
Germany and Spain, and they are taking “vigorous action” to address the
challenges in those markets.
Christian Salvesen stressed its underlying business remains strong and cash
generative as a result of its strategy of focusing on high margin, value added
business and the broad cross sector mix of its operations.
It said in France its Darfeuille acquisition is performing well as a result
of a strong customer base and a fully operating, in-country network.
The group noted its food and consumer operations across Europe were proving
highly resilient, while the UK industrial business continues to generate good
margins.
Christian Salvesen said the accelerated economic uncertainty post Sept 11
has delayed customers’ decisions on investment and outsourcing.
The group said volumes “are under pressure” in its industrial operations.
But it stressed its business is “inherently robust and cash generative”, with
nearly 50 pct of the group’s turnover coming from the stable European food
industry.
Along with its results Christian Salvesen announced it has been selected by
Tesco PLC to operate its southern frozen consolidation centre.
The group also announced it has been awarded a three-year contract valued at
16 mln stg by Metro France, the European cash-and-carry group.