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Cape hails Motherwell Bridge takeover for boosting its order book

CAPE plc has hailed the benefits of the £37.7 million takeover of Motherwell Bridge, describing it as an important part of the group's growth strategy.

The Middlesex-based group said the Motherwell Bridge business it bought in March had been a key driver of the 33 per cent increase in orders it enjoyed in the first half and has already helped boost profitability.

Cape bought Motherwell Bridge for its specialist engineering expertise in areas like oil storage tank maintenance, which is in big demand around the world.

It was the third firm to buy North Lanarkshire-based Motherwell Bridge since the business was subject to a controversial so-called revolving door receivership. This left members of the old Motherwell Bridge group pension scheme facing cuts in their retirement incomes.

Cape said the acquisition of Motherwell Bridge represented an important first step in its goal of offering a broader range of more specialist services.

The company added: "The integration of the business is progressing well and it is performing in line with our expectation."

Chief executive Joe Oatley said Cape expects its performance to improve in the second half as it benefits from the acquisition of Motherwell Bridge and UK margins improve, amid the economic recovery.

Cape's purchase of Motherwell Bridge triggered £1m windfalls for its chief executive Russell Ward and his predecessor Hugh Hayes.

It came ten years after creditors including Royal Bank and Bank of Scotland placed the then loss-making Motherwell Bridge in receivership as they tried to recover £45m debts.

Parts of the old group were bought by a new business that did not take on some of its historic liabilities, including the pension plan. The group scheme had 2,000 members at the time of the receivership but was in deficit by £11m.

Employee numbers at Motherwell Bridge have remained at around 300 since the takeover by Cape. Mr Ward is managing director of Cape's specialist services division, which includes Motherwell Bridge.

Cape increased orders by £78m in the half ending June 29, to £317m, from £239m in the first half of 2013.

The Motherwell Bridge acquisition boosted underlying operating profits by six per cent. The benefit was outweighed by other factors like foreign exchange movements. Cape's adjusted operating profit fell to £23.4m, from £26.5m last time. Revenue fell to £322.3m from £370.8m.

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