Ports group trading remains on course

ASSOCIATED British Ports said yesterday that trading remained in line with market expectations as it issued its final update ahead of its annual results, due to be announced in February.

ASSOCIATED British Ports said yesterday that trading remained in line with market expectations as it issued its final update ahead of its annual results, due to be announced in February.

ABP, which includes the ports of Ipswich, Lowestoft and King's Lynn in East Anglia, said its core UK ports business had continued to grow during the first 11 months of 2005, with volumes up in area including coal, iron ore and other bulk imports, cruise ship calls and agribulk and steel exports.

However, the group said that, as previously indicated, it expected roll-on/roll-off (ro-ro)volumes and stevedoring activity to be lower than in 2004.

ABP said that, besides volume growth, the business had also benefited from cost reduction measures introduced in 2004 to mitigate the anticipated decline in ro-ro volumes. As a result, underlying operating profits from the UK ports and transport operations were expected to increased by around 3%.

The group also said that its £400million, 10-year investment plan for its UK ports business remained on track, with major schemes at Immingham and Humber International on schedule to become operational in the first half of 2006.

ABP said that, as expected, there had been a reduction in vehicle volumes at Amports, the group's smaller ports and transport business in the United States following the depature of a major customer during the second half of last year but that, also as previousl reported, a new contract with Toyota had been secured to replace this business during 2006.

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On the property investment and development side, ABP said that operating profit from property investment rentals was expected to be similar to 2004 and while turnover from property development would be significantly lower - due to the mix and phasing of sales - operating profits should be ahead of last year.

ABP added that, under plans announced in 2004 for a £205million share repurchase programme, £140.5million has so far been completed, with the buy-back of 30.5million shares at an average price of 460p.