CAC2000 losses grow more than tenfold due to roadwork
Published:Wednesday | April 10, 2019 | 12:06 AMSteven Jackson/Business Reporter
The industrial air-conditioning supplier CAC2000 Limited reported that its sales dropped by one-third and its losses grew more than tenfold in the January quarter 2019 compared with the previous year, arising from roadwork disruptions adjacent to its head office on Marcus Garvey Drive in Kingston.
Investors tanked the company’s stock price which dropped by nearly half since the start of the year.
CAC stated that it would utilise this period of reduced activity to restructure its processes to become more efficient in order to raise profitability when normality returns. It involves measures to contain expenses and, importantly, to ensure that its operating ratio is equal to or better than last year’s, and that operating cash is positive and improved by the third quarter.
“With much of the construction disruption and temporary sales and cash-flow issues still affecting our daily processes, our amazing CAC team has decided to turn this major negative into a positive by restructuring, adapting and changing our overall operational approach,” said the company’s Chief Executive Officer Steven Marston.
“As a company, we have set ourselves a goal to win and execute more projects, build on our residential and service sales while driving down inventory and accounts receivable to free up cash,” he added.
The roadworks at a section of Marcus Garvey Drive, Spanish Town Road and Hagley Park Road began last year and will extend into late 2019. The improvement works, which are meant to address traffic congestion, were contracted to China Harbour Engineering Company by the Jamaican Government, through the National Works Agency.
CAC made sales of $166.4 million over three months ending January 2019 compared to $239.5 million over the corresponding period a year earlier.
It recorded a $37.7-million net loss for the quarter compared with a $2.2-million net loss the previous year. Also, the company’s cash and equivalents balance at $144 million dropped from $228 million a year earlier.
The company’s stock opened 2019 at $16.92 per share and traded at $9 last Wednesday, losing 25 per cent last week alone. CAC 2000 listed its 129 million ordinary shares on the junior market of the Jamaica Stock Exchange in January 2016. Just over 52 per cent of the shares are held by its parent company, Caribbean Air Conditioning Company Limited, based in St Lucia.
CAC previously indicated that a quarter of CAC’s sales come from walk-in customers. The company continues to open its doors for business, but access to its entrance is restricted due to blockages from the roadworks as well as construction equipment, often making it difficult for containers delivering the air-conditioning units it supplies to reach its complex. A number of other businesses in the area have also reported a reduction in sales arising from the ongoing roadwork.