P&O keeps sailing in rationalisation wave
The Peninsular and Oriental Steam Navigation Company will return to its seafaring roots and drop its involvement in other businesses, as part of a rationalisation that could also see its finance function cut back, group chairman Lord Sterling announced this week.
Speaking at the publication of P&O’s 1998 preliminary results, Lord Sterling said: ‘Cruises, ferries and ports will be our core divisions. These businesses offer high growth and high returns and are ones where we have a strong position in key world markets.’
The three businesses accounted for more than two-thirds of group operating profits last year.
Finance director Nick Luff outlined pre-tax profits of #415.9m, up 15% on 1997’s #363.3 m. After exceptionals, pre-tax profits fell 15% to #368.9m.
The rationalisation will see P&O, which started life as a shipping line in the 1830s, exit from property.
The investment management portfolio will be disposed of ‘possibly by demerger’, while construction services company Bovis will be floated and exhibitions business Earls Court Olympia sold.