Mark Hart says the west is growing, expects better times for Cargo Handlers

Saturday, January 09, 2016

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Cargo Handlers Limited is looking to expand its fuel transport, logistics business and stevedoring services as the west continues to see economic growth, Mark Hart, CEO of Cargo Handlers, said last week.



The chief lines of business of the company — which listed on the Junior Stock Exchange in December 2010 — are stevedoring, equipment leasing and management services.


At year end September 2015, Cargo Handlers reported net profit of $135.92 million, 3.2 per cent up on 2014 when earnings were $131.72 million.


Revenues increased by $17 million year over year, but operating expenses also climbed by $12 million.


Total revenue for the year ended September was $236.92 million, compared to $220.39 million the year before. Operating expenses were $103 million compared to $91.26 million the year before. Earnings per share for the year ended were $4.94 compared to $3.16 in September 2014.


Hart told the
Jamaica Observer that he anticipated improved performance in the coming year based on developments in the west. He didn’t provide more details, but the Port Authority of Jamaica (PAJ) announced in 2015 a development plan for the port in Montego Bay which is expected to lead to increased use.


Up to September, inflows climbed for all segments during the year especially for leasing and asset management. The year saw growth of 42 per cent for management services while that for leasing climbed 33 per cent. Together, however, the business lines bring in just 13.5 per cent of total revenue.


Revenue for management services climbed from $7.65 million at September 2014 to $13.2 million in 2015. For leasing, inflows climbed to $18.18 million from $13.64 the year before. Cargo Handlers’ largest source of earnings – stevedoring –— was fairly flat at $202.54 million, coming from $199.12 million at September 2014.


Cargo Handlers, located in Montego Freeport, is 34 years old. As indicated in its prospectus, its roots lie in 1967 when the Montego Freeport stevedores working at the old Montego Bay wharves downtown were re-employed by Montego Freeport, of which Antony ‘Tony’ Hart, CD (executive chairman of the company) was the developer and chairman.


In 1981, the original investors in Montego Freeport Limited sold the majority of the company’s shares to the Prudential Corporation and that entity was not interested in operating a stevedoring company.


The stevedoring operations were therefore taken over by Antony Hart and Jane Fray, the former financial controller of Montego Freeport Limited. As the original shareholders, they operated the company and were later joined by Mark Hart.


Cargo Handlers’ was priced at $37.65 on the stock exchange on Thursday, January 7. The company has seen a 40 per cent improvement in market value, year to date.


Cargo Handlers’ IPO price was $12.50 per share. Since listing in 2010, company assets have grown from $81 million to $275.92 million in value.


Cargo Handlers entered the fuel transport business after acquiring Bulk Liquid Carrier Petroleum Limited in early 2014. The new business line was then projected to double revenue.


At the time of listing, net income averaged $1.4 million annually. The $53.54 million targeted in its IPO was used to expand handling capacity at Montego Freeport, and purchase equipment including a 20-ton forklift and a shore crane for cargo operations.



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