7th Apr 2014 08:57
LONDON (Alliance News) - Chinese logistics company, China Chaintek United Co Ltd Monday said revenue and profit rose in 2013, driven by its logistics services division, and said construction for its new logistics park, which is key to future growth, will take roughly 18 months to complete.
China Chaintek, the provider of logistics for consumer goods makers in China, said its pretax profit rose 12% to RMB284.9 million in 2013 from RMB253.5 million the prior year.
It said that revenues in the year increased by 2.9% to RMB350.6 million, compared with RMB340.6 million in 2012, driven by its logistics services division.
The group said that it is confident in future growth prospects for the business. Signalling its confidence, it declared a final dividend of 4 pence - proposed in the form of a scrip issue with a cash alternative - giving a total dividend for the year of 6 pence per share.
During the year, the group made a final payment on the land use rights for its proposed new logistics park. The land use rights were acquired for a total of RMB273 million, and the company said that construction will take approximately 18 months before the commencement of operations.
The company's existing logistics centre is running at capacity. The company told Alliance News last year it was having to turn down some new work because it doesn't have the space to handle it.
It is building the new centre on a 145,600 square metre plot of land in an industrial zone in Jinjiang, about 14 kilometres from its existing operational headquarters.
The group paid for the logistics park from its own cash resources, as sale and lease back is not currently an option in China at present. The company said it has sufficient resources to fund the estimated RMB600 million construction costs to complete the whole project.
"The new Logistics Park will enable China Chaintek to satisfy the growing demand from manufacturers for outsourced logistics. The board expects the logistics park to be at full capacity within three years of completion and it will provide China Chaintek with the ability to double its turnover once full capacity has been reached," the firm said in a statement.
As well as acquiring the site for its new logistics park, China Chaintek also has been busy further developing its Inventory Solutions business and investing in IT systems.
China Chaintek said its logistics service division, the main revenue driver for the group, continued to develop strongly and during the year won a total of 16 new customers, including a big contract with VIPshop, an online discount retailer for brands.
It said that shoes and apparel, which accounted for 72% of the division's revenues in 2012, reduced to 69% in 2013. The group said the customer list of the logistics division remains broadly based with about 300 customers, 75 of whom account for the majority of revenue, with 10 accounting for 34% of revenue.
China Chaintek also has an inventories unit, which provides warehousing services such as storage and packaging. The division operates from a central distribution centre in Jinjiang and two regional distribution centres.
The group said it held cash of RMB319.3 million at the end of the year, down from RMB342.7 million a year earlier.
China Chaintek shares were trading 2.0% higher Monday morning at 130.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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