Mersey Reports Profits, Eyes British Port Consolidation

Mersey Docks and Harbour Co. has reported an increase in profits of nearly eight percent in the first half, its shares following suit with a similar rise. Representatives of Mersey, which owns the Port of Liverpool and the ports of Sheerness and Chatham in southeast England, said the company’s investment program was reaping rewards as it managed to push up profits despite flat volumes of cargo. The program was buoyed by achieving record volumes in two key market sectors — containers and Irish Sea roll-on roll-off freight — which gave it a better overall mix of cargo, officials added. This helped compensate for the loss of nearly a million tons of business due to the ban made effective Jan. 1 on the dumping of river sludge out at sea. In Liverpool, the demise of sludge depressed the port’s total throughput to 13.7 million tons from 15 million. Mersey, which suffered a damaging dockers’ strike in 1997, also reported good business for its property arm, using waste land near Liverpool city center for hotels and flats. Chief Executive Trevor Furlong said the buoyant business at its ports was an indicator Britain’s economy was on the up. Furlong went on to say that if fewer companies were running Britain’s ports, Mersey would be in a good position to expand. “The UK ports industry needs consolidation, whether that is in two years’, three years’ or five years’ time, but consolidation has got to take place,” he said. “If the right port came up at the right time at the right price we could be there,” he added. “Our gearing at the half year is only 35-36 percent so we have a very strong balance sheet.” Liverpool is the company’s heart, but with its ownership of Sheerness and Chatham, it is the UK’s second operator behind Associated British Ports. Most of Britain’s 100 or so ports are run by much smaller companies — some owned privately, some by the local authorities and some by trusts, like Dover and the country’s biggest port Sullom Voe which serves North Sea oil rigs. The previous Conservative government encouraged these ports to go private, with proceeds shared by the state and the port, but the Labor government has let things cool, Furlong said.