Investment Column: Mersey Docks thinks long-term
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE INFAMOUS strike by 329 dockers has cast a shadow over Mersey Docks' share price for the past few years. But now it has been settled, albeit at a cost of pounds 10m, attention has turned to a port business which has been doing rather well despite the disruption.
Underlying profits rose 10 per cent to pounds 48m thanks to record cargo volumes and a continued improvement in productivity. The shares responded by jumping 24p to 536.5p, a four-year high.
An ambitious pounds 65m capital expansion programme should reap long-term rewards. New roll-on, roll-off and freight facilities and a redevelopment of its vast property holdings are sensible investments, although the expansion will have the effect of dampening short-term earnings growth.
Mersey has deserved its re-rating. Charterhouse Tilney forecasts full- year profits of pounds 46.5m, putting the shares on a prospective p/e ratio of 15, in line with rivals such as AB Ports and Forth Ports.
However, given that port stocks have been treading water for some time now over fears of an economic slowdown and shockwaves from the Far East crisis, Mersey's share price now looks about right.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments