Move Logistics Group is reporting a lift in revenue for its FY22 result and has announced a deal to acquire a new bulk liquids and dry powder transport business for around $15.2 million.
The transport and logistics firm posted revenue of $349.1m for the 12 months to June 30. This was up $16.8m compared to the previous year with the company saying it benefitted from the ability to pass through rising costs, particularly fuel costs.
It reported a $4.2m loss after tax which was impacted by $3.4m of costs incurred as part of its business reset strategy.
Alongside its full-year result, Move announced the acquisition of Fluidex Transport which is a leading bulk liquids and bulk dry powder transport provider operating throughout New Zealand.
The acquisition is for 100% of the business and assets and a freehold property in Blenheim. The purchase price includes $7m payable at settlement funded from existing bank facilities and a final payment of $8.2m payable on July 31, 2024.
Move points to some key strategic achievements throughout the year including a board refresh, diversification of the shareholder register including the addition of several Australian institutions, a dual listing on the ASX, a new leadership team, a strengthened balance sheet with reduction in debt and entry into coastal and trans-Tasman shipping.
A transition to an “asset light model” is also underway with owner drivers now comprising 39% of freight drivers compared to 32% in the previous period.
Move executive director Chris Dunphy says a lot of progress has been made since the company rebranded in July last year.
“We are working our assets smarter, investing in what matters and driving better returns for our business. We have redefined our strategy and have set ambitious growth targets that will deliver value for our shareholders.
“We are putting the foundations in place that will allow us to expand our market presence and optimise our earnings. While there is still work to be done, we are confident we have the people, the strategy and the passion to achieve our goals,” he says.
The company reports an operating environment of “increased pressure” in FY22, with increasing costs and normal trading levels impacted for many of its customers.
Trading volumes in freight and fuel were below expectations, reflecting the impact of COVID-19 on fuel deliveries in the first half of the year.
Continuing global supply chain disruptions have led to a delay in the company’s asset replacement programme, with lead times for the delivery of new trucks “significantly extended”.
This is resulting in increased maintenance costs on existing assets. Operating costs, particularly fuel, parts and labour, have increased with inflation, with some offset following the pricing review and reset undertaken by Move in the first half of the year, the company adds.
“However, these conditions have also provided opportunities to grow MOVE’s market share as competitors start to wane. Move is well resourced to take advantage of changes in the sector to grow both organically and through bolt on acquisitions,” it says.
Results are expected to “considerably improve” in FY23 as the freight reset continues, contract logistics builds on the work done in the last year and international capitalises on new opportunities, the company says.
Some of the growth initiatives under development include the new coastal and trans-Tasman shipping service, which further expands Move’s multi-modal offer, it says.
The company has also been identifying particular sectors for future growth including viticulture, dairy, beverages and aquaculture.
Move chair Lorraine Witten says the last year has been one of “re-shaping the business and defining a clearer more focused service”.
“We are now positioned for the next phase with a stronger balance sheet, and a talented team to drive profitable growth. The priorities for FY23 are to continue to improve our freight division and transitioning to an asset light model, implement digital systems, execute growth in priority customer segments and build our multi-modal offer, particularly in shipping,” she says.
Fluidex Transport acquisition
Move says the acquisition complements its existing fuel and bulk liquids logistics business and supports its strategy to further grow and enhance integrated supply chain solutions for targeted customer sectors, including dangerous goods (DG) and food grade commodities, such as oils, wine and dairy.
Move contract logistics chief operating officer James Watters says the deal is a “compelling and complimentary bolt-on acquisition”.
“Fluidex has a national presence, blue-chip clients and a modern fleet. These are long lead-time assets which further strengthen our integrated solution and customer offer,” he adds.
Fluidex has recurring revenue of more than $11m and bases in Auckland, Mount Maunganui, Blenheim, and Christchurch with a team of 35 people. Its fleet includes over 50 prime movers and 90 trailer combinations, including specialist chemical and food grade tankers and ISO tanks.
“We pride ourselves on reaching the highest industry safety and customer service standards and are dedicated to using the latest technology to monitor and maintain performance,” Fluidex owner Tony Galbraith says.
“After 60 years fulfilling transport services to the New Zealand industry, it’s great to see Fluidex transitioning to a new owner with a commitment to high quality bulk liquids logistics and customer service,” he says.
