Serious fall in P and O profit

Press, Volume CXII, Issue 32838, 11 February 1972, Page 14

Serious fall in P and O profit

(N.Z.P.A. Staff Correspondent! LONDON, February 9The P and 0, one of the world’s biggest shipping groups, is sailing close to the takeover wind, the London “Evening Standard” suggested in a business page headline tonight.

The newspaper said this “sombre thought arose today with the news that the 'group's profits have been 'more than halved, from £12,042,000 to £4,149,000.” AU told the P and O has about 120 ships, including passenger liners which visit New Zealand, and a fleet of cargo ships whose trades include the Britain-New Zealand run. The “Evening Standard” said the reduced profit was not unexpected after warnings last year by the company that costs had been increasing faster than revenue.

But’ noting that another British shipping group, Cunard, had recently been taken over by Trafalgar House Investments, the article said it was intrigued by a final paragraph attached to today’s financial statement by P and O.

I The paragraph said that I while no useful purpose would be served by formally revaluing the properties the groups own throughout the world for its trading purposes, the present market value of the properties was about £5O million more than their book value. “Was this,” asked the “Evening Standard,” “a defensive posture to tell any hungry bidders just how expensive a -take-over would be?”

P and O in the last two years has emphasised its rationalisation, and diversification away from Conventional shipping. This, according to London stock market sources, means that divisions of the group such as ship-repairing, road transport, engineering and warehousing could be hived off by a successful bidder. P and O would not comment on the speculation. However, it is understood that the chairman (Mr Ford Geddes) will make a reference to the reports during the group’s annual general meeting later this month.

P and O’s statement did not include a forecast of the 1972 profit.

The P and O directors will recommend a final dividend of 7.5 per cent, making a total of 12 per cent for the year to September 30.