Christian Salvesen Interims

First half pension costs and tough market conditions took
their toll on earnings of struggling logistics firm Christian Salvesen PLC,
which also unveiled a radically lower dividend payment.
But the restructuring of the business, prompted by the company’s February
profit warning is bearing fruit.
It has merged its two UK operations and found annual cost savings of some 4
mln stg a year and Salvesen reckons it will meet the City’s more conservative
full-year earnings forecats.
Pretax profit before execeptional items fell 5.3 mln stg to 10.1 mln a,
figure dented by the inclusion of an additional 2.4 mln charge to cover its
pension deficit.
That black hole was estimated at 66 mln stg at the period end, but that
doesn’t account for the rally in world equity markets and the shortfall is seen
closer to 45 mln now.
Total sales from continuing operations fell 2 pct to 417 mln stg over the
six months, though at constant exchange they actually fell by 3 pct.
Reflecting the company’s changed financial position the group is paying out
a dividend of some 1.2 pence a share, less than half the size of the
distribution it made a year ago which totalled 2.65 pence.
Chief executive Edward Roderick still reckons there is still work to do get
Salvesen back on the right road.
“Our priorities during the second half are clear. We aim to further reduce
the cost base, and to exercise tight control of capital expenditure,” he said.
In a separarate announcement Salvesen announced a 5 mln stg deal to
distribute healthcare products for SSL PLC.