Falling demand bites into Wridgways' profit

Wridgways suffers slump in profit, as failing economy and undercutting from competitors bites into its bottom line

August 21, 2009

Wridgways has suffered a slump in profit, as a failing economy and undercutting from competitors bites into its bottom line.

The transport and storage operator’s profit after tax fell 5.2 percent last financial year, from $7 million to $6.6 million.

A statement from the company says it "suffered margin erosion as consumer demand decreased in the later half of the year along with heavy competitor discounting practices in the market"

Despite this, Wridgways says it has maintained strong revenue levels in its domestic moving and storage division, adding that the end of financial year results are good news considering the economic challenges in the market.

"Wridgways recorded its second largest profit on record in a year of extreme economic turbulence and uncertainty," the statement reads.

The company’s revenue also grew by 4.6 percent, up from $118.7 million to $124.2 million.

The share price, however, fell from 21.97 cents to 20.83 cents, while profit before interest and tax also dropped 5.7 percent.

According to the statement, earnings before interest and tax were $9.4 million last financial year, compared to $10 million from the previous period.

While Wridgways is not saddled with debt, the company still expects this financial year to be challenging.

"Although there are signs of improvement in the global environment it is still very difficult to predict how reduced corporate activity and the fluctuating housing market will impact the relocation industry," the statement reads.

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