Cape ponders asbestos disease fund

INDUSTRIAL services group Cape is considering setting up a ring-fenced fund to finance future asbestos-related disease claims.

Chairman Martin Kay said the board was reviewing its options and had appointed Dan Swarzmann of PricewaterhouseCoopers, as an expert in resolution of long-term liabilities, to work alongside City lawyer Travers Smith Braithwaite. The company would report on its findings in 12 to 18 months.

Kay said: 'We have good cashflow, a good business model and would like to give more certainty to claims, which is a responsible position. We want to reduce any perceived risk for shareholders.'

Group operating profit from continuing operations was up 32.7% at £7.3m before £3.8m of costs for industrial disease compensation. Cape had a £10.1m credit from claims in 2002, meaning pre-tax profits fell last year to £5.5m from £14.6m.