Grand Harbour Marina plc recently held its annual general meeting followed by a meeting with stockbrokers. During the stockbrokers' meeting chairman Nick Maris gave a brief overview of the 2007 financial year, which he described as exceptional. GHM posted a pre-tax profit of €6.6 million following the sale of three 75-metre super-yacht berths for €10 million. This enabled the directors to recommend the payment of a net dividend of €2 million, equivalent to €0.20 per share. The company also recognised a substantial growth in pontoon fees as a result of the increase in occupancy and the 17 per cent rise in berth rates. But Mr Maris pointed out that the 197 pontoon berths are now fully occupied, and as a result the company may not experience such rates of growth in pontoon income in future years.
The chairman revealed that during the first quarter of 2008, the company sold a 30-metre super-yacht berth and it hopes to sell further berths in the coming months, given the strong level of enquiries to date despite the difficult international economic climate. Mr Maris spoke about the increase in berth sales achieved throughout the years. Grand Harbour Marina sold its first berth at a rate of €500 per square metre. In 2007 this increased to €2,050 per square metre for the berths up to 40 m in length and €2,250 per square metre for the larger berths. The chairman mentioned that the 30-metre berth sold in 2008 was at a 15 per cent increase to the rate per square metre achieved in the previous year.
Grand Harbour Marina currently has a waiting list of some 80 boat owners seeking a pontoon berth. The chairman explained that the company is currently seeking to increase the area for pontoons to satisfy the growing waiting list. The aim is to temporarily change the current structure near Xatt ir-Risq, which is currently dedicated to super-yacht berths. GHM plans to transfer part of this area to pontoon berths for rental in order to satisfy this demand. The company estimates that it can create 35 additional pontoon berths from this area.
In reply to various questions from the floor, GHM's chairman provided details of the demand and supply dynamics within the super-yacht sector. The demand for marina berths arises from newly built yachts and the migration of yachts from one marina to another. In the super-yacht sector, the current order book indicating the number of yachts being built is the largest ever with over 900 yachts on order. These yachts, which are due for delivery within the next four years, represent a 22.5 per cent increase in yachts from the 4,000 super-yachts currently in use. Naturally, these yachts will require berthing space. The supply of berths has lagged behind demand for many years, and this has resulted in growing waiting lists and a rise in berth rental rates in the mature markets, namely south of France, Italy, the Balearics, Turkey and Greece. Although the market has been conditioned by a supply shortage, berth supply has grown very slowly, mainly due to planning restrictions, difficulties in constructing marinas and the investment required as well as the long time necessary to complete a marina. The supply of marina berths is therefore expected to rise at a much slower rate than the increase in the number of new yachts. This will continue to result in a supply shortage and consequently higher selling rates for berths should continue. In the 2007 annual report of Camper & Nicholsons Marina Investments Limited, the AIM listed company and majority shareholder of GHM, it was reported that Port Adriano (located on the south-west of the bay of Palma de Mallorca, the capital of the Balearic Islands) experienced record berth selling prices in 2007 at €8,000 per square metre. At GHM they are €2,250 per square metre.
During the meeting with stockbrokers Mr Maris also stated that the government's recent announcement of the privatisation of yacht marinas is very positive for the company and Grand Harbour Marina plans to bid when the respective tenders are issued by the government.
GHM's chairman concluded the meeting by stating that the remaining 22 super-yacht berths present a very sound long-term investment because at current rates these are valued at circa €32 million.
The share price of Grand Harbour Marina was off to a quiet start this year as it traded within a tight range of between €1.70 and €1.73 during the first three months. But following the announcement of the 2007 full-year results and the dividend declaration the share price climbed by over 29 per cent within a week to €2.25 after hitting an all-time high of €2.354 on April 8. The equity remained in strong demand throughout the month of April as it traded with the entitlement to the handsome dividend until May 2 when the share price closed at €2.30. After turning ex-dividend, the equity dipped to €2 per share before settling at €2.05, 20 per cent above the March 2007 IPO level. Last week it gained 4.9 per cent to €2.15.
Investors are looking forward to announcements relating to the sale of further super-yacht berths, the publication of GHM's interim results due shortly and developments on the upcoming privatisation. Grand Harbour Marina indicated a strong interest in the privatisation of the Msida and Mġarr marinas currently managed by the Malta Maritime Authority as well as managing the new marinas which the government has indicated it will create. Recent media reports mentioned that the government is planning new marinas in the Grand Harbour and Marsamxett, with others possibly in St Paul's Bay, Marsascala and Gozo. The commitment by GHM and its majority shareholder Camper & Nicholsons to this sector is important to portray the island as a leading yachting destination.
Rizzo, Farrugia & Co. (Stockbrokers) Ltd, RFC, are members of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the issuer/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof, and no representation or warranty is provided in respect of the reliability of the information contained in this report.
© 2008 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved.
• Mr Rizzo is director of Rizzo, Farrugia & Co. (Stockbrokers) Ltd.
The chairman revealed that during the first quarter of 2008, the company sold a 30-metre super-yacht berth and it hopes to sell further berths in the coming months, given the strong level of enquiries to date despite the difficult international economic climate. Mr Maris spoke about the increase in berth sales achieved throughout the years. Grand Harbour Marina sold its first berth at a rate of €500 per square metre. In 2007 this increased to €2,050 per square metre for the berths up to 40 m in length and €2,250 per square metre for the larger berths. The chairman mentioned that the 30-metre berth sold in 2008 was at a 15 per cent increase to the rate per square metre achieved in the previous year.
Grand Harbour Marina currently has a waiting list of some 80 boat owners seeking a pontoon berth. The chairman explained that the company is currently seeking to increase the area for pontoons to satisfy the growing waiting list. The aim is to temporarily change the current structure near Xatt ir-Risq, which is currently dedicated to super-yacht berths. GHM plans to transfer part of this area to pontoon berths for rental in order to satisfy this demand. The company estimates that it can create 35 additional pontoon berths from this area.
In reply to various questions from the floor, GHM's chairman provided details of the demand and supply dynamics within the super-yacht sector. The demand for marina berths arises from newly built yachts and the migration of yachts from one marina to another. In the super-yacht sector, the current order book indicating the number of yachts being built is the largest ever with over 900 yachts on order. These yachts, which are due for delivery within the next four years, represent a 22.5 per cent increase in yachts from the 4,000 super-yachts currently in use. Naturally, these yachts will require berthing space. The supply of berths has lagged behind demand for many years, and this has resulted in growing waiting lists and a rise in berth rental rates in the mature markets, namely south of France, Italy, the Balearics, Turkey and Greece. Although the market has been conditioned by a supply shortage, berth supply has grown very slowly, mainly due to planning restrictions, difficulties in constructing marinas and the investment required as well as the long time necessary to complete a marina. The supply of marina berths is therefore expected to rise at a much slower rate than the increase in the number of new yachts. This will continue to result in a supply shortage and consequently higher selling rates for berths should continue. In the 2007 annual report of Camper & Nicholsons Marina Investments Limited, the AIM listed company and majority shareholder of GHM, it was reported that Port Adriano (located on the south-west of the bay of Palma de Mallorca, the capital of the Balearic Islands) experienced record berth selling prices in 2007 at €8,000 per square metre. At GHM they are €2,250 per square metre.
During the meeting with stockbrokers Mr Maris also stated that the government's recent announcement of the privatisation of yacht marinas is very positive for the company and Grand Harbour Marina plans to bid when the respective tenders are issued by the government.
GHM's chairman concluded the meeting by stating that the remaining 22 super-yacht berths present a very sound long-term investment because at current rates these are valued at circa €32 million.
The share price of Grand Harbour Marina was off to a quiet start this year as it traded within a tight range of between €1.70 and €1.73 during the first three months. But following the announcement of the 2007 full-year results and the dividend declaration the share price climbed by over 29 per cent within a week to €2.25 after hitting an all-time high of €2.354 on April 8. The equity remained in strong demand throughout the month of April as it traded with the entitlement to the handsome dividend until May 2 when the share price closed at €2.30. After turning ex-dividend, the equity dipped to €2 per share before settling at €2.05, 20 per cent above the March 2007 IPO level. Last week it gained 4.9 per cent to €2.15.
Investors are looking forward to announcements relating to the sale of further super-yacht berths, the publication of GHM's interim results due shortly and developments on the upcoming privatisation. Grand Harbour Marina indicated a strong interest in the privatisation of the Msida and Mġarr marinas currently managed by the Malta Maritime Authority as well as managing the new marinas which the government has indicated it will create. Recent media reports mentioned that the government is planning new marinas in the Grand Harbour and Marsamxett, with others possibly in St Paul's Bay, Marsascala and Gozo. The commitment by GHM and its majority shareholder Camper & Nicholsons to this sector is important to portray the island as a leading yachting destination.
Rizzo, Farrugia & Co. (Stockbrokers) Ltd, RFC, are members of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the issuer/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof, and no representation or warranty is provided in respect of the reliability of the information contained in this report.
© 2008 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved.
• Mr Rizzo is director of Rizzo, Farrugia & Co. (Stockbrokers) Ltd.