Making Sense Of Cogent Holdings Limited

Cogent Holdings (SGX: KJ9I) is probably not that well known in Singapore. This could be due to the nature of its business – it is a logistics company.

The group is involved in many logistics aspects, such as transportation, warehousing, container-depot management, automotive logistics and project cargo. Apart from its logistics business it also has a property management arm which manages “The Grandstand” at the former Turf City.

Some of the notable logistics services provided comes from its automotive operations. Cogent provides warehousing for the Land Transport Authority (LTA) for illegally modified cars. It also provides LTA with services such as repossession of cars for outstanding taxes and for impounding.

Apart from under its warehousing business, Cogent manages and operates approximately 3.5 million sq. feet of space. It also offers numerous warehousing services such as packing, palletisation and chemical drumming services to name a few.

Complementing these services is the group’s transportation division which sports 100 prime movers, trucks and lorries and over 400 trailers.

Cogent’s trailing twelve months (TTM) earnings at end June 2016, stood at S$6.25 cents. At its current share price of S$0.77, this implies a price to earnings ratio of 12.3.

Gross debt stood at S$115 million with cash and equivalents coming in at S$44.8 million.

For the first six months of the year, Cogent had positive free cash flow to the tune of S$13.7 million. This is a healthy free cash flow.

Cogent is involved in a whole range of logistical operations. The diversity provides it with numerous income streams to generate revenue. On the financial front, Cogent seems to be performing well with a strong balance sheet and free cash flow.

While it all looks good from here, these positives should serve merely as a starting point for investors to dig deeper into the company.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Esjay does not own shares in Cogent Holdings Limited.