CAC 2000 strikes partnerships to fix losses
FACED WITH a first quarter loss and peaks and troughs in its revenue flows, air conditioning company, CAC 2000 Limited, has struck a deal with Real Marketing out of Trinidad and Tobago to represent Crown Ltd.
Gia Abraham, CEO, describes Crown Ltd as a global company that has distribution companies in different partners in the Caribbean. Crown Equipment is a US-based global company that offers forklifts, palletisers and other warehouse equipment. CAC 2000 will be operating in partnership with Real Marketing, to explore other possibilities such as elevator repairs and servicing of Crown equipment as part of a package.
“Some of their larger customers here are actually our customers and so I see it as a complementary service that we can marry with what we presently offer,” Abraham said, adding that while involvement with the equipment from Crown would not be readily seen as part of core business at CAC 2000, it is in line with the stated strategy of diversifying revenue streams.
“While from the outside it may be said that it is to the left-field of what CAC 2000 does, the fact is that it is about servicing; meaning what we offer can be enhanced,” Abraham said.
She says the sales team at CAC 2000 will be moving to add the servicing of Crown equipment to the suite of services the company offers.
Abraham is looking to the new revenue streams as a way to feed better revenue flows.
For the first quarter ended January 2023, CAC 2000 suffered a loss. Abraham sees the situation as temporary; in that there was a reduction in the number of projects in the company’s pipeline.
“Compared to last year at the same time (the) portfolio … brought over, was about $200 million below (the) previous year,” she said.
That $200 million drop translated to a $94.34 million, or 42.45 per cent fall in revenue flows, according to the company’s January 2023 first quarter report. This did not help CAC 2000’s bottom line. The company suffered a loss of nearly $51.82 million; $19 million, or 58 per cent more than the $32.75 million loss for the similar quarter in 2022.
Abraham says the push right now is to re-mediate the situation by focusing on building the capacity of the service side of the business as well as the sales side, while still building the projects portfolio. She says “the portfolio side tends to have a lot of hills and valleys”, which have to be smoothed out by cultivating the supplemental flows from the sales and services sides.
The CEO says with the new focus, there has been an uptick in business and she will be streamlining those projects to smooth out the lumps in revenue flows over the remaining quarters for the current financial year.
“Projects are usually mid to long-term (seven to 18 months). What you’ll find is, this is where the sales team can go after smaller short-term projects running about three to four months,” Abraham said.
To do this, the CAC 2000 sales team has been relocated to a new store and showroom at Shop #3U, Village Plaza. Abraham says the opening of the store, which was delayed for two months, will give CAC better access to its clients; and relieving the misery of operating from the problem-plagued Marcus Garvey Drive base.
Abraham says going forward the old base will serve mostly as a warehousing facility.
The Junior Market-listed company CAC 2000 is the outcome of the original business, Conditioned Air and Associated Contractors, which was acquired from the Mecala (now ICD) Group. The 217 Marcus Garvey Drive address has always been a key feature of the landscape, at the heart of a sprawling industrial estate. But the location has caused some problems for CAC 2000; first with a decline in business from the surrounding industrial estate and then the problem-plagued changes in traffic arrangements in the area with the building of an overpass.
Ready access to the company’s premises has been curtailed, with only a single lane going north allowing access. Adding to the woes is the persistent problem of underground leaks, which have necessitated periodic digging up of the road.
“What I do see is the benefit of being uptown where people can get to us easier and the staff can move around,” Abraham said, adding that the ease of access holds out hope for more business coming to CAC 2000.
In addition to the CAC 2000 sales staff, the Village Plaza location will also house the sales team from subsidiary, Enervate. This is a 50/50 partnership with Tropical Battery to sell green energy products and services.