Seapower set to surge on cold storage outlook

SEAPOWER Resources International is an investment holding company whose activities include cold storage warehousing, securities broking, corporate finance work and food processing.

Brokerage Dharmala Securities recently put a long-term buy on the stock, saying the cold storage warehousing business would substantially increase earnings.

A price war and the sluggish business in the financial services market meant revenues from warehousing and financial services dropped.

Major competition initiated the price war in late 1993 by reducing monthly rentals and offering other fringe benefits to customers, but this came to end in December 1994.

This resulted in the group's interim results for 1996 improving, with operating profit surging 94.6 per cent and Seapower can expect solid growth of 107 per cent in operating profit for its cold storage business in 1997.

The company is seeking to further enhance its income base as it is now trying to buy a cold storage related business. The restructuring of Seapower's financial services division and the hiring of executives from Merrill Lynch will further develop its clientele.