Cape (CIU) – not the place to be in oil services
The international provider of essential support services to the energy and mineral resources sectors issued a disappointing Interim Management Statement for the period 1 July 2013 to date. New CEO, Joe Oatley, formerly of high margin, high cash generating Hamworthy and a totally different business to CIU, seems to have a big job on his hands sorting out this low margin service operation. There are plenty of more attractive high margin ways of playing the oil services arena http://reut.rs/HTJDR3
While overall trading for the third quarter was in line with the Board’s expectations the Board now expects the full year result will be further impacted by operational challenges on a specific project in the Middle East. The UK business continues its robust performance and is trading in line with expectations, with higher revenue being offset by a slightly lower margin resulting from a mix of work weighted more toward the lower margin offshore market. Volumes in Kazakhstan reduced as anticipated as major project work there, such as the Kashagan development project, nears completion. You’ve got to be in command…