Qube Logistics signals takeover intentions

Date: 20.08.2010

Qube Logistics is signalling future takeovers if its full year results statement is anything to go by

By Rob McKay | August 20, 2010

While Toll is famously expansionary, Qube Logistics is pushing its case for takeovers if its full year results statement is anything to go by.

With a near doubling of its annual net profit to $24.3 million, from $12.5 million last financial year came a statement of intent from the Kaplan Funds Management firm, which manages Qube.

"Qube will continue to pursue new investments to support growth within its existing logistics businesses and in new logistics businesses that meet its investment criteria," Director Michael Britton says.

These would be in firms "that have a strong market position and/or sustainable competitive advantage".

The company that has significant investments in P&O Trans Australia, part of its Landside Logistics arm and Automotive & General Stevedoring, among other logistics-related investments, was upbeat about expected growth and earnings.

The focus over the next six to12 months will be to continue bring Qube’s management in-house to simplify its corporate structure while increasing its ownership of the underlying operating businesses.

"The operating businesses have delivered very pleasing results and have the quality management teams, strategic assets and opportunities to continue to achieve strong growth in the future," Chairman of Qube’s Investment Advisory Committee Chris Corrigan says.

"We expect, subject to no material adverse change in economic conditions, that the operating businesses will continue to increase revenue and earnings from the levels achieved in the period to June 2010."

The company insists second half performance exceeded the projections for the comparable previous six months by around 13 percent and 12 percent respectively for Landside and for Automotive & General.

"These results were driven by a focus on providing an integrated logistics solution covering multiple elements of the logistics supply chain," it says.

"The businesses have also leveraged their strategic locations to provide value-added services to customers.

"The results benefited from a strong recovery in container volumes and imported vehicles as well as continued strength in bulk volumes."

Meanwhile, Qube has about $100 million including debt funding invested in proposed intermodal hubs at Moorebank and Minto.

"The efforts of the past 12 months have been focused on transforming Qube from an investment entity into becoming a major listed operating logistics company," Managing Director of Kaplan Funds Management Sam Kaplan says.

"While there are still several important milestones to complete this process, significant progress has been made and Qube now owns majority or significant shareholdings in a number of high quality logistics businesses."