Thursday, 23 December 2010

Peel feels the crunch in annual port results-Even the Liverpool Daily Post are Questioning Their Financial Situation.

I wrote last week about the financial situation of Peel Holdings, asking just how are they going to fund their over ambitious, and looking even more ridiculous, schemes for both Wirral and Liverpool, combined with empty promises for the Panamax Terminal, whilst building Port Salford.
It has taken over a week but the Daily Ghost writer for Peel Holdings finaly catches up with a in depth look at the situation from Peter Elson. It raises concerns about the position of John Whittakers Empire and just clears a little bit of, those, Smoking Mirrors at Oldham Hall Street. 
Peel feels the crunch in annual port results

Dec 22 2010

by Peter Elson, Liverpool Daily Post
PORT of Liverpool owner Peel Ports suffered a sharp fall in trade last year because of the global economic downturn, according to figures filed recently.
The company’s financial performance was further impaired by interest payments of more than £1m a week.
The group owns the Manchester Ship Canal, River Medway Ports (Port of Sheerness and Chatham Docks), Clydeport (Hunterston, Greenock, King George 5th Dock Glasgow and Ardrossan Harbour) and Heysham Port.
It also operates port facilities, freight forwarding and cargo handling businesses at Glasgow, Greenock, Hunterston, Dublin and Belfast, plus Irish Sea and North Sea freight shipping services.
In a period that coincided with the peak of the recession, the group’s turnover fell £36.6m to £362.5m. Pre-tax profits rose 9%, up £914,000 to £11.6m.
This was boosted by resilient performances by its joint ventures, including its 47% shareholding in Cammell Laird shipyard.
Accounts just filed at Companies House for the group company, Peel Ports Shareholder Financeco, show that interest payments remain high as the group services £1.2bn debt.
Although down slightly, by £2.9m, the group paid interest of £62.1m.
Peel Ports paid a £24m dividend which contributed to net liabilities of £435m.
The directors have relied on a number of factors in continuing to adopt the going concern basis.
Its borrowings of £1.06bn are in place until the end of 2013, subject to covenants which have not previously been breached, and their forecasts anticipate this will be maintained.
The group, which had net debts of £213m to other group and related companies, also had undrawn loan facilities of £60m at the end of the financial year through a variety of banks.
It expects that costs will be lower in the year to March, 2011, because of the restructuring that has taken place.
Its port and canal operations, which accounts for nearly two-thirds of the group’s turnover, slipped 3% to £230.2m, compared to £238.1m for 2009..
Shipping income suffered a bigger drop at £61.1m for 2010, in contrast to £81.3m for 2009, down 25%.
Transport income, too, fell sharply, with £38.8m for 2010, from £48.1m in 2009.
Rental income remained stable, at £28.5m.
The group has continued to reduce the number of people directly employed by the company, down nearly 400 people in the year to 1,300. The group employed more than 2,000 people just two years ago.
It reduced staff costs by nearly £14m to £55m, although it spent £8.5m on restructuring, which included redundancy costs.
The group’s immediate parent company, Peel Ports Holdings (CI), is registered in the Cayman Islands and its ultimate holding company, Tokenhouse, is an Isle of Man company.
The directors proposed and paid interim dividends of £24m, compared to £30m in 2009.
According to the Report and Financial Statements, the tonnage throughput has decreased year on year, which was fully expected as a result of the decline in the wider global downturn.
“The resulting lack of liquidity in the financial markets has reduced the ability of businesses and individuals to borrow money and this has ultimately led to a lack of demand in the global marketplace,” said the report.
“Despite the continued downturn in the global economic environment, the results for the year have remained strong, which is largely attributed to the benefit of a strong and diverse portfolio of customers and service provision.
“Although several European ports have been hit by the global decline in container volumes, Peel Ports Group is not as reliant on container handling as many other port businesses.
“With its strong and diverse service offering the Group is showing greater resilience in the current environment.”
The Port of Liverpool is by far the biggest element in the group, and the UK’s seventh largest freight port.
Taken together, all six Peel Ports form part of a wider transport infrastructure.
The key operational risk and uncertainty relates to the dependency upon the economic activity of the businesses and consumers within the port hinterlands, says the report.
The report continues: “These consumers and businesses generate the trade which flows through the ports.
“When they are subject to economic cycles, or at the extreme, to failure, there is an unavoidable impact on the port.”
Peel Ports’ five gateways handle a wide range of international trade which amounts to more than 65m tonnes of cargo a year. Meantime, the battle for ownership of Peel Holdings’ giant Trafford Centre shopping mall goes on.
Capital Shopping Centres (CSC) group is recommending that shareholders support a proposal that would see John Whittaker’s Peel Holdings sell the Trafford Centre – one of Britain’s biggest – to it in an all-share deal.
This leave Mr Whittaker’s company owning 24.7pc of CSC and the businessman becoming deputy chairman of CSC and avoiding capital gains tax.
David Simon, the largest shopping mall operator in the US, who owns 5.1% of CSC through his Simon Property Group (SPG), released details of an alternative financing proposal, which he claimed would be “more attractive” for CSC shareholders.
Mr Simon said he continued to have concerns about the £1.6bn price being sought by Peel.
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