Company to stay the course with fleet age reduction
Lindsay Transport will stick with the transport strategy that continues to pay dividends, the company has told investors.
This means it will continue with its horticulture and refrigerated transport niche focus, reduction in average fleet age while increasing utilisation, push into rail freight and develop new strategically located hubs.
The direction will include extracting synergies “from each division including Lindsay Fresh Logistics”.
The prime mover and trailer renewal focus aims to reduce maintenance costs and sees 57 units replaced last financial year.
The company has bought 10 rail reefer containers as part of its modal push, with the company averring that rail “is three times more fuel efficient in transporting one tonne of freight than road transport”.
Despite a 7 per cent rise in annual revenue to $315 million, the company saw net profits fall to $6.1 million from $6.5 million from the cessation of its fuel tax credit.
In the transport arm, profits before tax rose 10.5 per cent to $20.1 million, with higher fleet utilisation, cost savings and expansion into new regions seeing margins rising by 0.9 per cent to 9.1 per cent, despite revenues falling from $219 million to $216 million.
Despite the fleet age focus, repairs and maintenance costs rose slightly from $13.7 million to $14 million. But fuel and oil costs fell almost from $49.6 million to $39.8 million.
This was dwarfed by subcontractor spending reductions, from $49.8 million to $34.3 million, which, in turn, was offset somewhat by employee benefits expenses, up from $73.4 million to $82.9 million.