Howard Smith Ltd. said its tugboat division was not for sale, despite market speculation about an impending divestment that boosted its share price. "We do not have a 'For Sale' sign on our tugs at this time," Howard Smith managing director Ian Tsicalas. Tsicalas said the Australian tugboat business was a solid earner, while U.K. towage was a "good steady business without being spectacular".
"It's a steady-as-she-goes type of operation with good cash flows and we're happy with that," he said.
The sale rumor pushed Howard Smith as much as five percent ahead to an eight-month high of A$9.15, before it eased to close up 32 cents or 3.7 percent at A$9.02, outpacing a stronger overall market.
"There's a bit of talk that Howard Smith is looking to sell their tugs so that's pushing the stock ahead," said Wayne Nicholls
, head of trading at fund manager BT Funds Management, which manages A$46 billion in assets in Australia and A$213 billion worldwide.
Chairman Frank Conroy told the annual meeting two months ago that Howard Smith's Australian towage performance had been flat and its U.K. tug revenues had fallen due to refinery closures.
Conroy at the time also addressed speculation on a possible sale of its towage operations, flagging that Howard Smith saw its growth coming from the hardware business.
"The board and management have deliberately chosen not to add to the speculation of whether a divestiture is to occur in the future except to say that while our towage operations are an important contributor to overall profit performance and generate good cash flows, the growth for Howard Smith will come from our distribution business," Conroy said. - (Reuters)