Lindsay rebounds from natural disasters


Innovative use of subbies and fees along with maintenance savings help the bottom line

February 29, 2012

Trucking and rural goods firm Lindsay Australia has bounced back from the Queensland floods, with a 29 percent rise in first half net profits, compared with the previous half, to $3.2 million.

Total revenues rose 10 percent to $135.4 million, while income from cartage and hire rose to $87.6 million, from $78.4 million.

The company’s transport division saw profits before tax rise from $6.37 million in the earlier term to $9.2 million, due to higher volumes and fuel levies.

"Freight revenue was particularly strong in November and December," Chairman and Director John Pressler says.

"North Queensland revenue increased approximately 40 percent over the previous corresponding period.

"This growth reflectrs the business acquired in Mareeba in February 2011 and growth in customers in Innisfail more than offsetting the impact of Cyclone Yasi on banana volumes in the early part of the prior half year.

"Good revenue growth was also achieved in Brisbane, Sydney and Melbourne."

Pricing pressure from customers and competitors remains strong and has forced out some small to medium sized firms in the refrigerated transport market, with more likely to follow, thereby tightening that market, the company observes.

Lindsay increased its use of permanent and casual subcontractors in November and December and the move has paid dividends, with the company’s fleet travelling 5.5 percent fewer kilometres and employee costs falling 1 percent.

Subbie costs rose to $16.8 million from $11.8 million in the earlier period.

At a time when safe rates and vehicle handling delays are ongoing industry issues, Lindsay has introduced a cost component for servicing distribution centres.

"The division continues to be challenged by the growing demands of distribution centres in capital cities due to unloading delays and traffic congestion to travel to sites," Pressler says.

"The division introduced standardised deliver fee pricing for produce deliveries to distribution centres in August 2011.

"This fee structure has enabled better recovery of costs from customers for delivering to distribution centres."

New equipment saw repair and maintenance costs fall 13 percent but registration fee increases were in the order of 20 percent.

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