ABP 'will not buy' other UK ports

Associated British Ports today rejected suggestions that it could be a key player in the consolidation of the ports industry.

Speaking after unveiling a 4% lift in annual profits and amid growing evidence of interest in the industry from leading venture-capital players, chief executive Bo Lerenius said the company was not looking for major deals and the focus was very much on organic growth

Responding to suggestions that ABP might be a potential suitor for other operators, he said: 'We are not in the market for any major acquisitions.' His comments are unlikely to dampen interest in the sector, however. Earlier this month shares in Forth Ports rose amid rumours that it could be a takeover target.

Late last year CVC Private Equity put a bid approach to Mersey Docks & Harbour while property group Peel Holdings bought Glasgow's Clydeport in 2003 and also owns the Manchester Ship Canal. The attraction of port companies is their property assets and the value of transforming old warehouses into apartments, offices and shops.

ABP, still Britain's biggest ports operator, today reported a 4% rise in annual earnings after long-term contracts drove growth at its ports business. Much of the growth comes from several long-term UK contracts ? with 17 new deals secured in 2004 and more than 80 major customer contracts won over the past five years, AB Ports achieved annual underlying profits of £135.4m - a figure ahead of analysts' expectations.

The group, which has 21 ports at locations including Hull, Southampton and Grimsby, added that plans to invest more than £400m over the next ten years remained on track. Many of the the previously announced schemes are focused on the Humber Estuary and include expansion to meet UK coal demand and a roll-on roll-off ferry terminal on behalf of DFDS Tor Line.

The investment opportunities, which stem from the security offered by long-term contracts, mean AB Ports will continue to shun acquisitions in favour of achieving returns of 15% or more from organic growth.

In UK ports and transport, AB Ports said turnover rose 4.7% to £365.4m, following an increase of 4.2% in volumes handled to 129.3m tonnes.