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ArmorGroup Sees Strong 2007 Due to Global Unrest Print
armorgroupArmorGroup International - strong market in 2007

20.3.2007 - Britain's ArmorGroup International Plc, which provides security in trouble spots, believes insecurity in Afghanistan and the kidnapping of oil workers will provide for a strong market in 2007.

The company posted full-year results slightly ahead of revised expectations on Tuesday but profit-taking sent the stock almost 7 percent lower, a trader and analyst said.

"The results are good ... it has already got guaranteed revenue from committed contracts this year which is more than the committed contracts for all of last year -- there's been some profit-taking after an early leap," said one dealer.

ArmorGroup said it expects strong market conditions in 2007, driven by global insecurity and conflict, and sees revenue growth in Afghanistan in line with planned spending by Western governments on reconstruction and development.

It also sees growing revenue from its kidnapping and ransom division because of the increase in kidnappings of oil and gas workers, particularly in Nigeria.

Shares in ArmorGroup -- which protected 30 percent of the convoys in Iraq in 2006 -- were down 6.7 percent at 84p by 1250 GMT, valuing the company at around 44 million pounds ($86 million).

The shares reached a 10-month high of 96p in early trading before falling back on profit-taking, a dealer said.

ArmorGroup posted a pretax profit of $9.6 million for the 12 months to Dec. 31 -- slightly ahead of house broker ABN Amro's recently revised estimate of $9.3 million. However, this was down on the profit of $12.5 million made in 2005 because of the cancellation of a contract to train bodyguards in Iraq.

ArmorGroup said in January it would miss previous expectations it would make $10 million in pretax profit because that contract to protect the Iraqi judiciary had been cancelled.

"The company has to rebuild confidence after a turbulent 18 months ... the highlight of these results is the 46 percent growth in non-Iraq revenue," said ABN Amro analyst Richard Rae.

Rae expects pretax profit of $12.5 million in 2007 and earnings per share of 16.5 cents and believes working with oil and gas companies will be a key growth area.

ArmorGroup's board is recommending a dividend of 2.75p for 2006, the same as in 2005.
 
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