IT upgrade helps Lindsay gain $6m fuel tax windfall

By: Rob McKay


Bounty comes as group sees financial impact of Cyclone Debbie and SA floods

IT upgrade helps Lindsay gain $6m fuel tax windfall
Lindsay Australia has much to celebrate despite the weather

 

Lindsay has six million reasons to welcome the impact of its information technology upgrade, its annual results reveal.

During the last financial year, the group instituted an external review of it fuel tax credit processes after an internal exercise identified a possible $491,000 in possible claimable credits.

"The new processes focused on utilising new systems and data, which has been implemented with the recent IT system upgrades," Lindsay says.

"The external review was conducted to ensure the Lindsay Group was using an accurate and reliable methodology to ensure it was claiming the correct amount of tax to which it was entitled.

"Using the new processes to review prior periods, external consultants identified a further $6,158,000 of fuel tax credits to which the business was entitled.

"Almost the entire amount had been refunded during the year with the exception of a $43,000 receivable at the reporting date."

Meanwhile, a slight rise in revenues was unable to hold Lindsay Australia to rise in profits, with South Australia and Queensland weather events doing the damage.

Revenues were up 2.3 per cent to $337.7 million compared with the previous financial year but net profit fell 20.4 per cent to $6.4 million.

Second half net profits were $487,000 compared with the previous first half of $2.6 million.

The Transport arm, with its 390 prime movers and rigids and 650 trailers, provides two-thirds of the group’s revenue and that rose 1.4 per cent to $227.4 million for a gross profit contribution of $25.1 million, up 10.5 per cent.

The weather events "challenged Transport’s ability to maximise freight utilisation", the company says.

"While revenues were consistent between 2016 and 2017, additional repositioning moves, where the prime mover and trailers are moves with low volumes of freight, increased costs."

The consolidation of sites at Acacia Ridge is expected to boost returns this year.

The Rural segment’s revenue was up 5 per cent to $105.5 million but profits were down 3.9 per cent to $3.4 million.

"The main contributor to the margin compression was increased sales of high value low margin fertilisers and chemicals as a proportion of total sales," Lindsay says.

"The additional volumes helped reduce freight imbalances within Transport in regional towns."

Employee costs rose 10 per cent to $100 million while subcontractor use reduced with costs falling 20 per cent to $30.3 million.

"The board has high expectation of the year ahead," chairman John Pressler says.

"As major capital works are completed, the focus will turn to improving utilisation, operational efficiency and growing our export markets."

One highlight of the financial year was the official opening of the official opening of the John F Pressler Centre.

The site consolidates four locations spread out over the Rocklea and broader Brisbane area into one substantial complex over more than 26,000 square metres that houses corporate administration and Brisbane transport function.

This includes cold storage, warehousing for Rural and Transport customers and a rural business showroom.

The warehouse is 5,000 square metres, including more than 4,000 square metres of refrigerated storage for 1,000 chilled pallets and 2,300 frozen pallets.

The rural distribution centre is almost as big again, with 3,000 racked pallet spaces.

There are more than 400 square metres of wash bays for the automated truck wash, eight fuel dispensers and more than 200 square metres for drivers’ quarters including 12 bunk rooms, lounge and kitchen.

The company says that, strategically, this site underpins the future of Lindsay Australia by enabling far more efficient operations of our three divisions, Lindsay Transport, Lindsay Rural and Lindsay Fresh Logistics and an expansion in frozen and chilled freight and storage.

You can also follow our updates by joining our LinkedIn group or liking us on Facebook