Transport firm Move Logistics Group has posted a net loss of $1.4 million for its half year results.
That’s down from a $2.6m profit on the same period last year and reflects the impact of the COVID lockdown and regional restrictions in New Zealand from August to December 2021, the company says.
Revenue for the six months was $183.3m, up 2.3% on the prior comparative period with a strong recovery seen from the second quarter following the lockdowns.
Fuel deliveries decreased significantly during the first quarter and several large infrastructure projects were deferred or put on hold which affected Move’s specialist division, it says.
However, the second quarter saw a “positive recovery” and this is expected to continue into the second half of the financial year, the company reports.
It says focus is on margin improvement and is targeting sectors which meet margin and value criteria.
“Customer retention has been strong with a company-wide rate review now well underway. Excluding clients on fixed contracts, Move is seeking to improve its operating margins and shed underperforming business,” it says.
The results also include costs involved in restructuring and resetting the business as part of the strategic plan, as well as “inflationary pressure”.
The firm has previously announced a restructure to the business and a number of legacy activities in the company are being addressed in relation to their fit with the new business model.
This included a refreshed board and leadership in mid-2021 and experienced transport and logistics sector executive Chris Dunphy took up the role of executive director.
A comprehensive business review has been completed with key priorities identified to drive improvement and growth of the business, particularly in freight and contract logistics.
There company says there will be a focus on margin improvement, asset utilisation and profitability, with a range of initiatives.
This includes technology driven operating efficiencies with a planned implementation of a new transport management system.
A strategy is also underway to convert more of Move’s fleet to leased trucks and grow the percentage of owner-drivers contracted to the company.
A multi-modal approach including its first chartered coastal vessel expected to be delivered to New Zealand in the fourth quarter this year.
A $40m capital raise was successfully completed during the period, introducing new shareholders to the register, including a number of Australian investors, and enabling a reduction in net debt to $14.5m.
Outlook
The company is expecting “sector and economic headwinds” to continue into the second half of the financial year.
COVID pressures remain, with disruptions expected as Omicron spreads, including on the supply chain in New Zealand and the labour force.
“Significant planning has been undertaken to mitigate disruptions to Move and the critical services it provides, with access to rapid antigen tests and a testing programme in place for essential workers,” it says.
“High inflationary pressure and rising interest rates are also expected. Move will raise freight rates to offset increasing costs wherever possible. Driver shortages are becoming more acute and it is hoped that the loosening of border restrictions will enable more skilled drivers to enter the country,” it says.
“With a comprehensive business review now complete, the company is moving ahead with a clear two-year strategic plan to improve margins and grow the business.”
The company is expecting the second quarter recovery to continue and expects FY22 performance to be broadly in line with FY21.
