TIL Logistics group has posted net profit after tax of $4 million for its first full year result as a listed company.
Sales revenue was up 9% to $355.1m for the 12 months to June 30. Gains were delivered across all divisions, particularly from the warehousing and logistics operation as new storage capacity came online in the second half of the year.
The company says the “transport and logistics sector remains fragmented” and it aims to build on this through “carefully selected acquisitions” into the future.
The specialist sector grew significantly following the acquisition of Specialised Lifting and Transport Group, which delivered additional revenue of $11.8m.
The bulk liquids division also delivered a year-on-year increase in sales revenue despite a strong prior year that included one off revenue gains from the pipeline disruption.
Multiple long term fuel delivery contracts were secured in FY19, underpinning the business going forward.
This includes a three-year agreement with a large New Zealand company Lactanol to service its ethanol transportation.
Pacific Fuel Haul, a division of TIL Logistics, also signed a long term, exclusive, strategic supply contract with Z Energy and Farmlands Co-operative in 2018.
Another major highlights for FY19 was becoming a signatory to the Climate Leaders Coalition and signed a memorandum of understanding with Hiringa Energy to develop hydrogen fuel cell technology transport solutions.
Operating costs increased to $332.6m, reflecting the higher cost environment, expenses associated with growth initiatives and a full year of being a listed provider with associated corporate and governance costs.
TIL has also faced higher operating costs associated with fluctuating fuel prices, road user charges and regional fuel taxes, increased wage costs and higher costs for parts and equipment due to the lower exchange rate.
Growth initiatives have also had a cost impact, with increased property rent costs with expanded warehousing capacity, fleet lease costs, establishment of the senior leadership team. Higher repairs and maintenance also came as new fleet decisions were delayed while new contracts were finalised and tightening legislation, the company says.
Earnings before interest and tax (EBITDA) was up on the prior year to $25.4m with an increase in adjusted EBITDA to $28m.
TIL chief executive Alan Pearson says “FY19 was a year of business growth with expanded capacity, new business acquisitions and wins and organic growth”.
“A significant focus for management was the continuing amalgamation of TIL’s brands and businesses into a cohesive group organisation, which allows us to offer our customers an end to end supply chain offer.
“TIL is well positioned to continue building on its strengths and the new opportunities that are available to us as we meet our customers’ needs and enhance their experience of TIL through the use of technology and consistent quality service delivery,” Pearson says.
TIL is expecting an improved performance in FY20, driven by new customer contracts, additional warehousing capacity, organic growth and the benefits of FY19 investment into growth initiatives.
“Opportunities have been identified across all sectors to improve volumes and utilisation, expand the offer and drive efficiencies,” the company says.
TIL expects ongoing high demand from the food, rural and building and construction sectors. Growth opportunities have been identified for all TIL’s divisions, particularly in specialised, international and non-fuel bulk liquid haulage.
