Today's update has reassured investors with the news of its second cargo management contract at its new Mumbai site
Companies: Mercantile Ports & Logistics Limited
Port builder and logistics management group Mercantile Ports (LON: MPL) has seen its shares jump this morning with the announcement it has won its second contract at its new Mumbai site, which is yet to be completed.
Shares rose 14% on Friday morning after Management told of its new 7-year partnership with an unnamed, Indian-based logistics and handling company.
The update said:
"MPL will provide berthing facilities and approximately seven acres of backup land suitable for storage of cargo, which is expected to include pulses, fertilizer and construction materials."
The contract will see MPL handle "a minimum of one million tonnes of cargo in year 1, two million in Year 2 and three million in Year 3."
Today's announcement also gave an update on the progress of the new facility, with the target of being part-operational by year-end having been met, while marketing efforts have been stepped up ahead of its first cargo in the second half of January '18.
Executive Chairman of MPL Nikhil Gandhi commented:
"Management is very pleased to have reached this important milestone. The contract announcements, together with the commencement of operations, leads management to be increasingly optimistic on the operational prospects of the Company as we seek to achieve our goal of creating a modern logistics facility, which is strategically positioned to be an important part of Mumbai's logistical infrastructure."
The Group is forecast to turn its first profit of c. £1m in FY17, which will be reported in early 2018. Consensus forecasts Revenues to grow substantially in FY18 to c. £9m while Net Losses are also forecast to grow to from £1m in FY16 to £4m and £12m in FY17 and FY18 respectively.
Currently, MPL has a Market Cap of c. £30m and a cash balance of £19m.