Transport group Move Logistics has posted net profit after tax of $900,000 for its full-year result.
The company says it reflects an inflationary environment, significant project variations, increasing fuel and fleet maintenance costs, as well as non-trading items
Excluding non-trading items, net profit after tax was up 71% on the prior year to $2.1m.
Sales revenue was up 6% to $353.2m and EBITDA was up 7% to $61.3m for the 12 months to June 30.
The period saw a refreshed board and leadership with Chris Dunphy taking up role of executive director in July and Mark Newman appointed as independent director.
The company is reporting continued economic recovery in New Zealand driving activity and demand across a range of sectors which are important sales areas, including residential construction, infrastructure, food and beverage and agriculture.
Group EBITDA margin remained flat at 17% with revenue gains from increased warehouse capacity and specialist haulage project work offset by increasing wage and fuel costs, higher fleet maintenance costs and significant project variations.
Four of Move’s five divisions delivered increased revenue and EBITDA, with a slight decrease in the international division which has been affected by supply chain headwinds and COVID-19 restrictions. The significant turnaround programme for the freight division continues, focused on improving utilisation and margins, it says.
Net profit included non-trading and impairment post tax costs of $1.2m. These were associated with a discontinued IT project, joint venture impairment and an acquisition which was not progressed.
The company reduced spend by 45% following COVID-19 while still maintaining baseline investment in fleet and equipment maintenance and technology.
Capex is expected to increase in FY22 as the company resumes sustaining capital expenditure, and investment into fleet upgrades and technology.
Chair Trevor Janes says the team were pleased to deliver a year-on-year increase in revenue and profit in a challenging environment but are “conscious that our business must and will do better”.
“We are now taking bold steps to ensure our business is fully optimised and strongly positioned for the future.
“Led by newly appointed executive director Chris Dunphy, a comprehensive business review is underway.
“This will lead to a clear strategy that unlocks the potential of our business, delivers value for all stakeholders and positions Move as the preferred transport and logistics provider in New Zealand,” he says.
Business review underway
Three immediate priorities have been identified to drive margin improvement, better utilisation of assets and profitability.
This includes a “turn around and reset” of the freight division; to invest in and deliver an “attractive multi-service solution” for contracted clients; and to optimise the property footprint to service client demand.
“The company will be moving forward with a value focused culture and a commitment to continually improve safety, customer response, workplace environment, sustainability and shareholder returns,” it says.
Outlook
While the current momentum in the domestic economy is expected to continue, supply and capacity constraints could temper growth in the short term, the company says.
It also points to inflationary pressures which “are now looking more persistent”, with increasing wage costs and the continuing challenge of driver shortages in the transport industry.
Private and public investment, as well as consumer demand and Government spending, is expected to drive demand in certain sectors such as construction and infrastructure.
The company says it will be targeting those sectors “that offer value accretive opportunities for the business”.
Executive director Chris Dunphy says “there is significant potential in the group”.
“Our timing is good to shake things up and position our business for a future as an integrated supply chain provider in New Zealand.
“A comprehensive 90-day business review is underway to reset the business and define a clear strategic pathway that will deliver on our priorities of margin improvement, better utilisation of assets and profitability.
“We will be brave in identifying our weaknesses as well as our strengths and doing what is needed to make Move a stronger, leaner and more profitable business.
“Essential to our success is our commitment to delivering value for our people and our customers and reducing our impact on the environment,” he says.
