Grand Harbour Marina plc is to actively tap into investment opportunities in Malta and overseas over the next four years in a bid to grow the operation further, company chairman Lawrence Zammit told The Times Business.
The company announced a €10 million bond issue on Tuesday evening. There is an over-allotment option of €2 million. The bonds, bearing an interest rate of seven per cent per annum, mature in 2017-2020.
As it strives to improve shareholder value, GHM is also seeking to realise some of the "steady flow" of enquiries for the sale of super-yacht berth licences at its premier Vittoriosa marina.
"Our intention is also to look for investment opportunities within the Grand Harbour itself," Mr Zammit added. "That could mean one of the marinas that the government puts up for privatisation, or even areas within the precincts of Cottonera. The company is studying other opportunities for marina development in Malta and within the GHM-controlled area itself. We have filed an application with the Malta Environment and Planning Authority for the reconfiguration of the marina to increase berthing space. In line with our intentions as listed in our initial public offering in 2007, we are also looking at the possibility of investing beyond our shores."
GMH, in which international yachting company Camper and Nicholsons has a 79 per cent stake, also benefits from its management agreement with its largest shareholder. The Vittoriosa marina is Camper and Nicholsons' flagship location.
In collaboration with Camper and Nicholsons, Mr Zammit said GHM would naturally examine opportunities within the Mediterranean but other regions further afield would be of interest to the company. GHM plays a significant role in Camper and Nicholsons' marketing efforts, particularly through the participation of major boat shows in London, Dusseldorf, and Monaco, and the support of high-profile events like the Rolex Middle Sea Race.
A year ago, Camper and Nicholsons - arguably the world's oldest yachting brand having been established in 1782 - relocated its operational headquarters to Malta. The two companies are actively raising the profile of the Malta package on the international yachting circuit. Camper and Nicholsons chairman Nick Maris believes the companies are the only two quoted marina companies in the world.
GHM has a staff of 14; Camper and Nicholsons employs a staff of 17, with Maltese in key roles such as sales and marketing, human resources, and business development. Mr Zammit stressed that the appointment of Camper and Nicholsons directors to GHM's board is a vote of confidence in Malta. The international group's marinas in the world's most beautiful locations include Grenada's Port Louis, Italy's Porto San Rocco, Egypt's Port Ghalib, and Turkey's Port Gocek. Two brand new marinas in Port Louis and in Cesme, Turkey, should come on stream by June.
Mr Zammit conceded that the economic environment was uncertain but GHM would take advantage of windows of opportunity presented by the current global scenario.
"Marina development takes time," Mr Zammit pointed out. "It took GHM two to three years between the completion of the marina and achieving full occupancy of the pontoons in terms of annual rentals. The sale of berths earmarked for super yachts is also taking time. But the enquiries are there and our track record for super-yacht berth sales is good. GHM has a waiting list for annual rentals."
The marina has seen increasing numbers of visitors enquiring about super yacht berth licences throughout the year as the international order book for luxury craft has remained fairly stable. Over the past 18 months, boat owners have not taken long-term decisions about berth licences, the chairman explained, but GHM is building on the consistent interest as it makes its projections for the future.
Mr Zammit said the company examined each opportunity for local marina development and acquisition under the marina privatisation drive on its own merits. Its bids for the Msida and Ta' Xbiex marinas were unsuccessful and GHM is currently assessing the Kalkara proposition.
Local boat owners should welcome the additional berth space on the island which will alleviate the shortage although Mr Zammit pointed out that the Maltese situation was not as problematic as in other parts of the world.
"The shortage of berths is an industry trend worldwide," he explained. "The industry has always experienced a shortage in terms of supply as compared to demand. The shortage in France could be four times as much, in Italy it could be twice. According to Malta Maritime Authority figures, the shortage in Malta is 1.5 times."
The company reported a half-yearly post-tax loss of €168,167 to last June. Earnings before interest, tax, depreciation and amortisation stood at €50,247 for the first six months of this year, more than double the figure for the corresponding period last year. There were no super yacht berth sales in the first six months of 2009.
Mr Zammit said rental fees for berths have been increased over time in a bid to boost revenue. While GHM's berth rates compared well with those of premium marinas overseas, fees for berths at state-owned marinas were significantly below Mediterranean market rates. According to the chairman, GHM has benefitted from the headway it has made in rental fees which will continue over the next few years. In the short-term, the company will also pursue sales of super-yacht berth licences, particularly in view of the impact a single sale had on the balance sheet. The chairman is mindful of GHM's responsibility to shareholders and pointed out that the company has given investors positive return.
"In 2007 GHM declared a dividend which was 12 per cent of dividend yield," Mr Zammit said. "The share price has risen by around 25 per cent from the IPO price. The return in terms of shareholder value has been positive in spite of the toughest 24 months we have experienced."