ABPH SELLS RED FUNNEL FOR £71 MILLION
Associated British Ports Holdings PLC (ABPH), the UK’s largest port operator, today announces that it has sold Red Funnel Group, its Southampton-based ferry and towage business, to J.P. Morgan International Capital Corporation for a cash consideration of £71 million.
Red Funnel Group comprises a variety of transport-related businesses, including ferries operating between Southampton and the Isle of Wight (Red Funnel Ferries), towage services (Red Funnel Towage), road distribution (Vectis Transport) and catering services (Masthead Services). For the year ended 31 December 1999, Red Funnel Group made a profit before interest, taxation and depreciation of £7.5 million on turnover of £24.5 million. As at 31 December 1999, Red Funnel Group had net assets, excluding ABPH intra-group debt, of £33 million. The sale price of £71 million represents an historic exit multiple of 9.5 times profit before interest, taxation and depreciation.
The sale of Red Funnel Group brings the total proceeds from disposals of non-core assets since 1 January 2000 to £148 million, and is a continuation of ABPH’s strategy of disposing of non-core assets, leaving the Group to focus on operating ports and value-added businesses within those ports. ABPH announced its intention to sell Red Funnel Group on 14 June 2000, and will in due course return £70 million to shareholders by means of a share repurchase exercise.
The Group’s previous share repurchase programme was completed in October 2000 and resulted in £150 million being returned to shareholders.
As previously indicated, ABPH intends to announce a pre-close period trading update on 13 December 2000.
Commenting on this latest transaction, Bo Lerenius, Group Chief Executive of ABPH, said:
“This is a further example of ABPH successfully executing its strategy of extracting value from non-core assets for the benefit of shareholders, allowing the Group to focus on operating ports and value-added businesses within those ports.”
A spokesman of J.P. Morgan International Capital Corporation, said:
“We look forward to a mutually beneficial partnership with Red Funnel. We are impressed by its consistent growth and development and will work closely with the management team at Southampton to ensure continued progress for the Red Funnel Group”.
Enquiries:
Associated British Ports Holdings PLC (020) 7430 1177
Bo Lerenius, Group Chief Executive
Richard Adam, Group Finance Director
Margie Collins, Corporate Communications Manager
Merrill Lynch International (020) 7867 2000
Mark Preston
Gareth Taylor
Finsbury (020) 7251 3801
James Murgatroyd
J.P. Morgan International Capital Corporation (020) 7325 5355
Hugh Paton
Notes to Editors:
ABPH operates the largest ports group in the UK, with 23 ports. Associated British Ports, the Group’s principal subsidiary, handles approximately a quarter of all UK seaborne trade.
Red Funnel Ferries was established 139 years ago as Southampton, Isle of Wight and South of England Royal Mail Steam Packet Limited, the original Southampton to Isle of Wight ferry operator. In the year ended 31 December 1999, Red Funnel Ferries carried 2.5 million passengers. Red Funnel Towage serves the Port of Southampton and the entire Solent area. Vectis Transport, Red Funnel’s road distribution company, links the Isle of Wight with all parts of mainland Britain, supporting its operations with warehousing and groupage services. Masthead Services provides catering and retail merchandise to customers on Red Funnel Ferries.
