Business Week - Dispute hits dock profits.
After a choppy year, the Mersey Docks and Harbour Company is preparing to announce annual results next Thursday hoping to convince investors that it has weathered the storm of a dispute earlier this year.
Treasurer Peter Sewell, a qualified accountant, is confident that the labour problems may not have as much of an impact as some fear. ‘It’s been a steady year really,’ he said, ‘that dispute is now resolved.
‘In terms of the total group business the dispute was only a minor issue.’
The shipping company was faced with a trading dispute in September resulting in the temporary closure of the South Bank Quay in Dublin, part of its Marine Terminals Division.
It was resolved in November, after the MTL workforce accepted proposals including revised work schedules and a three-month severance option. The swift response to this dispute contrasts with the controversial high-profile row the company faced with Liverpool dockers between September 1995 and January 1998.
The docks were re-opened in December last year and are now expected to be back and working to full capacity in March 2001.
At the time, the company issued a profit warning saying, ‘the closure has adversely affected both MTL’s trading and also that of the group’s shipping businesses. It is estimated that the adverse financial effect on the group’s results for the year will not exceed #3m.’
Sewell, a qualified accountant, said the finance department had benefited from the expertise of its finance chief Alastair Findlay in the past year.
‘He is a chartered accountant and has been finance director of Flemings,’ he added. ‘His expertise has helped us a lot. Having come from a merchant banking background he’s a whizz at financials.’ According to the treasurer, ‘Findlay’s general approach to business and financing means he is a very skilful communicator and negotiator.’
In August, the company announced ‘record results’ for the half year.
Turnover was #101m, up 9% on the previous year, and pre-tax profits grew 6% to #27m. But analysts at Merrill Lynch are not upbeat about the company’s results, downgrading the stock two weeks before the results.
Although analysts believe the results are likely to be in line with forecasts, they fear any closure and restructuring of Mersey Docks’ marine terminals may have an impact on profits.
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Following the dispute, analysts have been forced to remove #3m from profit forecasts, estimated between #55m and #58m.
Marine and port service information can be found at www.merseydocks.co.uk
SNAPSHOT
Interim results to 30.06.00
Turnover: #101.1m
Operating costs: #71.9m
Profit after tax: #19.8m
Earnings per share: 22.19p
Directors: Peter Jones (chief executive), Alastair Findlay (finance director), Gordon Waddell (chairman)
Auditor: PricewaterhouseCoopers
Company Profile: Mersey Docks manages and operates Liverpool and Medway ports and several terminals in UK. Its subsidiaries are port manager and consultancy Portia Management Services, Coastal Container Line, Concord Container Line and BG Freight Line. Mersey Docks was set up in 1972 and has been listed in the shipping sector of the London Stock Exchange since May 1974.