Falkland Islands Holdings to report fall in annual profits

published 17 April 2013

Falkland Islands Holdings, a British conglomerate which owns logistics, warehouses and retail outlets on the islands, expects to report a fall in annual profits.

The company anticipates pre-tax profit of £3.0m for the year to March 31st 2013, compared to £3.2m a year earlier.

The group said trading was satisfactory at its division Falkland Islands Company (FIC), which provides services to retail, distribution, port services, shipping, hotels and mineral exploration.

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Retail sales experienced growth while tourist activity declined with fewer cruise ship visits.

Preparations to ramp up activity at the Sea Lion discovery continued, including preliminary work on planning for related infrastructure projects.

"As a result, although turnover increased on the record levels seen last year, FIC's contribution is expected to be slightly lower," the company said.

Momart, the fine art and antiques shipping and storage company, delivered record revenues on the back of growth in large exhibitions and the global commercial art market.

Revenues at the Portsmouth Harbour Ferry Company were little changed on lower passenger numbers. Profits are expected to fall at the ferry company as a result of an increase in costs.

The Falkland Oil and Gas arm's drilling campaign proved a working hydrocarbon system in the South and East Falklands Basins. An extensive 3D seismic campaign is now underway to de-risk further the prospectivity and identify the next prospects for drilling.

The group ended the period with cash balances of £11.5m and bank borrowings of £2.0m.

"2012/13 was a particularly significant year for the group, as we raised an additional £10m of equity funds which will enable us to participate in the opportunities now emerging in the Falkland Islands," said Chairman David Hudd.

"We expect that there will be a quantum leap in the economy over the next decade and momentum is expected to build in 2014 as the development of Sea Lion commences. However in the short term conditions are expected to be quieter in the absence of drilling activity which has been a factor since 2010."

Shares fell 0.80% to 315p at 10:59 Wednesday.