Dissipating WA boom spooks investors as long run of double-digit growth comes to an end
Though CTI Logistics gave reasons for some optimism late last week, the market reacted sternly to its stated concern about market conditions, with the share price falling from $2.44 to start trading today at $2.11.
Transport, logistics and business services firm CTI Logistics continues to display healthy financial results with an 8.9 per cent interim profit rise on the previous first half to $6.7 million.
But this was down sharply from the past four consecutive years of double-digit growth in profit and revenue.
The Western Australian operation saw revenues for the first six months of the financial year soar 17.3 per cent to $73.8 million in the face of “the tough market conditions that have affected all businesses within the group”.
The outcome came despite the $1.25 million spent on its development of a regional road freight network in the state.
It was aided by a $2.9 million profit on the sale of one investment property while taking an impairment of $1.6 million on the sale of two others in a period marked by the start of the second stage of its Hazelmere warehousing and distribution complex that will add 4,000 sq m of warehouse space.
Despite the apparently creditable performance, the company says it is doing it tough
“We are operating in a market which has suffered from the end of the resources boom, and at this time it’s not easy to see light at the end of the tunnel, with all our businesses affected to some degree,” Executive Chairman David Watson says in a letter to shareholders.
“However, with the near completion of the second stage of our Hazelmere warehousing and distribution complex and with the ongoing development of our regional road freight network, we are positioning the company for significant growth in revenue and profit in the future, as conditions improve.”