March 6 (Bloomberg) -- Cape Plc rose to the highest price in four months after the supplier of scaffolding and fireproofing to energy companies said it’s “entering a sustained period of demand growth.”
Cape, whose clients include Exxon Mobil Corp. and BP Plc, said today that revenue growth quickened to 21.5 percent in the second half of 2011 from 1.1 percent in the first half. The company is “well-positioned for continued growth,” Chairman Tim Eggar said in a statement.
The stock gained as much as 6.6 percent to 457.6 pence, the highest price since Nov. 8, and was up 5.3 percent at 9:10 a.m. The shares have gained 38 percent this year, valuing Cape at 536 million pounds ($848 million).
Analysts including Sanjeev Bahl at Numis Securities reiterated today that investors should buy the stock. James Thompson at JPMorgan predicted the shares will reach 576 pence in 12 months, up from a previous target of 518 pence. Cape had the strongest advance on the benchmark FTSE 250 Index, which was down 1 percent.
“Momentum is building in a number of key regions and projects, indicating that Cape is entering a sustained period of demand growth for its services,” the company said. Strong cash flow allowed “significant investments in both hard assets and people in 2011,” Eggar said.
Cape, based in Singapore and registered in Jersey, provides industrial services such as insulation, cleaning and coatings to plant operators and construction companies. The company is benefitting from spending to maintain aging infrastructure in the U.K. and to develop new resources such as liquefied natural gas projects by Sonatrach, Algeria’s state-run energy company.
The company completed two acquisitions last year and is “actively progressing a number of further opportunities,” it said. Cape proposed total dividends on 2011 earnings of 14 pence a share, or 5.6 percent more than the average estimate of eight analysts surveyed by Bloomberg.
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