P&O growth slows
P&O trimmed profits expectations from its ports business yesterday, blaming a slowdown in consumer spending.
The group said it was seeing slower volume growth of its container business across British terminals as it cut £3-£4m off its August guidance of full year pre-tax profits of £177m.
Shares closed down 3.4 per cent at 302.5p. P&O, like other port groups, is experiencing a slow down in container business as companies reign in exports of goods. Chief executive Robert Woods said: “As we and many other companies have reported, the weaker growth rates seen in much of Europe earlier in the year are persisting.” P&O’s ports business accounts for 70 per cent of the group’s sales. The remaining 30 per cent of the business is in passenger trips. P&O said tougher markets in Europe were being partially offset by stronger growth in Asian and American markets, although Hurricane Katrina had an impact on third-quarter volumes.
Chief financial officer Nick Luff said: “The peak season we are now in hasn’t come through that strongly compared with earlier months. We believe that is a result of lower consumer spending and fewer goods being brought in.”
The company has been selling properties and cutting jobs at its loss-making ferry operations as part of a strategic review. P&O said expectations for its ferries business were unchanged. The company is still confident it will win government approval for its £1.5bn London Gateway ports and business centre announced earlier this year.