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Johannesburg - Cargo Carriers [JSE:CGR], transport and logistics company,
has warned of "crippling" cash flow challenges in the transport sector,
indicating that it expects a slow economic recovery.
In its latest annual report, joint CEOs Murray Bolton and Garth Bolton said the recession had already weakened many of its competitors, while it forced others to shut down.
They said they expect economic recovery to be slow. This suggests that transport companies such as Cargo Carriers, Super Group [JSE:SPG] and Imperial [JSE:IPL] could be in for a slow recovery in volumes.
"This had created opportunities for us and we anticipate that for some of the remaining competitors, any growth will be crippling from a cash flow point of view," joint CEOs said.
During the year under review, Cargo Carriers said its divisions concentrated on improving their quality of work by discarding
underperforming contacts and replacing them with new business.
The powders division, it said, has won a contact to deliver cement. This contract will double the size of the powders fleet. Cargo Carriers was also awarded a contact to deliver platinum matte in the mining industry.
In the chemicals division, the company has increased the fleet size by 33% to service new contracts.
Saved by state spend
"We are confident that the upgrade of both facilities and management at our Newcastle branch, and the establishment of a branch in Secunda, will position us well for further growth in this sector.
"As for the sugar unit, an extended contact in the Zimbabwean business, where we have installed new management and face the prospects of a Tongaat Hulett expansion, are really positive signs," the company said.
Chairperson Stan Chilvers said the results of new business would only be reflected in the 2010/2011 financial year.
He said during the first half of the year under review the company experienced the negative effect of the recession on volumes, but during the second half it began to see some recovery.
The company's recovery was led by government spending on infrastructure and by the private sector which ramped up inventories, requiring the movement of goods.
Revenue declined to R443.8m from R483m, but profit from operating activities increased by 26% from R38.2m to R48.1m.
Earnings per share rose 44% and headline earnings per share surged 116%, enabling the company to hike its dividend from 18.5c to 29.5c.
"Much of the positive performance must be credited to our industrial businesses, all of which managed to significantly improve their bottom line performance in difficult time," the joint CEOs said.
These divisions benefited from cost management, upgrade of fleet, and lower fuel and maintenance costs.
- I-Net Bridge
In its latest annual report, joint CEOs Murray Bolton and Garth Bolton said the recession had already weakened many of its competitors, while it forced others to shut down.
They said they expect economic recovery to be slow. This suggests that transport companies such as Cargo Carriers, Super Group [JSE:SPG] and Imperial [JSE:IPL] could be in for a slow recovery in volumes.
"This had created opportunities for us and we anticipate that for some of the remaining competitors, any growth will be crippling from a cash flow point of view," joint CEOs said.
During the year under review, Cargo Carriers said its divisions concentrated on improving their quality of work by discarding
underperforming contacts and replacing them with new business.
The powders division, it said, has won a contact to deliver cement. This contract will double the size of the powders fleet. Cargo Carriers was also awarded a contact to deliver platinum matte in the mining industry.
In the chemicals division, the company has increased the fleet size by 33% to service new contracts.
Saved by state spend
"We are confident that the upgrade of both facilities and management at our Newcastle branch, and the establishment of a branch in Secunda, will position us well for further growth in this sector.
"As for the sugar unit, an extended contact in the Zimbabwean business, where we have installed new management and face the prospects of a Tongaat Hulett expansion, are really positive signs," the company said.
Chairperson Stan Chilvers said the results of new business would only be reflected in the 2010/2011 financial year.
He said during the first half of the year under review the company experienced the negative effect of the recession on volumes, but during the second half it began to see some recovery.
The company's recovery was led by government spending on infrastructure and by the private sector which ramped up inventories, requiring the movement of goods.
Revenue declined to R443.8m from R483m, but profit from operating activities increased by 26% from R38.2m to R48.1m.
Earnings per share rose 44% and headline earnings per share surged 116%, enabling the company to hike its dividend from 18.5c to 29.5c.
"Much of the positive performance must be credited to our industrial businesses, all of which managed to significantly improve their bottom line performance in difficult time," the joint CEOs said.
These divisions benefited from cost management, upgrade of fleet, and lower fuel and maintenance costs.
- I-Net Bridge
