Cargo Handlers is by no means a sexy company but what it lacks in sexiness is made up from performance.
For the year just ended to September, the company out of Montego Bay reported revenue increase of 31 percent over 2012 and a 32 percent increase in profit to reach $95 million, an increase on the $64.6 million in 2012 which was up 24 percent on 2011. In the year just concluded, profit was negatively affected by a million dollar charge for damaged cargo compared to $356,000 in the prior year, administrative cost rose just over 20 percent to $13.8 million and other operating cost was up at a much faster pace at 28 percent to reach $74.75 million.
Return on equity rose from 64 percent in 2012 to 75 percent in 2013 with equity being $137 million at year end and $72 million at the end of 2012. Dividend paid during the year amounted to $63.3 million almost twice the $36 million paid in 2012. The 2013 payment is 74.5 percent of profits or a return on the stock price of $12 at the start of the fiscal year of 14 percent. The high level of payout may have been tied to the higher tax that was applied to dividends starting in April this year rather than a decision to effect a permanent increase. In 2012, the payout ratio was just under 56 percent or 96 cents per share.
The audited financial statements indicated by way of a note that by resolutions dated 19 December 2012 and 17 February 2013, the Board of Directors approved the payment of interim dividends in the amounts of $0.68 and $1.00 per share respectively. In the prior year, resolutions dated 15 December 2011 and 2 July 2012 approved interim dividend payments of $0.64 and $0.32 per share respectively. Based on the simplicity of the operation, there is hardly any need to stock pile cash. As such investors can expect a healthy payout each year, thus providing a good source for income.
The company ended up with cash of $131 million at the end of the year and total current assets of $150.7 million and current liabilities stood at only $20 million. The company owes related parties $30 million and related parties owe them $25 million at the end of September.
Stock outlook | Profits may have grown well in the year just ended with some of the increase flowing from the change in value of the local currency. How much gains can be expected going forward is unsure. Suffice to say, the stock looks like a reasonable income provider.
Related posts | Profits up at Cargo Handlers | Cargo Handlers profits up 38%
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[…] Cargo Handlers Limited advised that a resolution was passed by the Board of Directors at a meeting held on November 28, 2013 to invest in the Bulk Liquid Carrier Petroleum Limited. The company transports petroleum products across the island. CHL advised that this investment is expected to add $150 million in revenue. […]