Move Logistics Group is looking to sell its specialist and lifting business to focus on its “core” freight and contract logistics operations.
After receiving “unsolicited offers”, it has commenced a formal sale process to investigate the market interest in the sale of the specialist and lifting business, the company reported in its latest update and earnings guidance.
This segment provides transport and lifting solutions for oversized and large items and also carries out specialist moving jobs.
The company first announced the acquisition of Specialised Lifting and Transport Group (SLTG) in October 2018 in a deal valued at $19m.
However, along with a “significant decrease” in fuel deliveries, it is seeing the deferral of large infrastructure projects involving the specialist division.
The company is expecting FY22 underlying EBITDA to be between $53m and $56m, in line with FY21 performance.
It says trading volumes in freight and fuel are below expectations, reflecting reduced client demand and the impact of COVID on normal trading levels.
International volumes have improved in FY22 and returns remain strong, reflecting record ocean freight pricing.
The company says the New Zealand logistics sector continues to be impacted by COVID, labour shortages, supply chain disruption and cost inflation. This is delaying Move’s business turnaround programme, which commenced in August 2021.
Move executive director Chris Dunphy says while the turnaround is taking longer than anticipated, the team “remain confident of realising significant benefits of the re-alignment for the business in the coming 12 months and beyond”.
“The sale of the specialist division is in line with our strategy to focus on core business being freight and contract logistics. Move is now a stronger business, led by industry experts and with a robust balance sheet to support our growth strategy,” Dunphy says.
Continuing global supply chain disruptions have also led to a delay in the company’s asset replacement programme, with lead times for the delivery of new trucks “significantly extended”.
The company says 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 re-set undertaken by Move in the first half of the year,” Move says.
Key initiatives in the second half of FY22 include investment into technology, particularly the new Transport Management System, assessment of the coastal shipping opportunity as part of Move’s multi-modal strategy, vehicle upgrades and rationalisation and the ongoing freight division improvement programme.
The company says it has identified a number of opportunities to drive growth in line with its goal to be one of New Zealand’s leading transport and logistics providers.
