Transport arm lifts Lindsay profits


Company plans Perth cold storage project after upgrading fleet in 2017-18

Transport arm lifts Lindsay profits
Lindsay's transport division generated higher profits in 2017-18

 

Lindsay Australia has recorded a net profit of $8 million for the 2017-18 financial year, up 25.4 per cent on the previous year, on the back of strong performance in its transport division.

Company-wide revenues were up 8 per cent to $364.9 million, from $337.7 million in 2016-17.

Profits from Lindsay’s transport division were up 13 per cent to $28.43 million while revenue was up 10.2 per cent year on year – largely driven by increased utilisation rates, customer additions, pricing increases and fuel levy recoveries, the company says.


The profit announcement follows a weaker first half. Check out our story here


Company chief executive Kim Lindsay says the transport division had grown its revenue in spite of a volatile fuel pricing environment at the start of the year.

"This result is testament to our focus on improved utilisation rates and investment in latest technology and fleet upgrades," he says.

The company spent $23 million on renewing and upgrading its fleet in 2017-18 as well as building new refuelling facilities in strategic locations including Mareeba, Townsville, Emerald and Dubbo.

"These tanks coupled with an upgraded fuel management system will remove reliance on service stations and facilitate improved fuel cost management," the company says.

The company is planning a new greenfield cold storage project in Perth, which, Lindsay says, will provide "the national network desired by our existing eastern seaboard customers". 

Company chairman John Pressler says in his chair’s report that the Perth will be underpinned by a long-term transport supply agreement from an unnamed "major Perth manufacturer".

The company will add 35 new refrigerated rail containers and additional equipment costing $5.7 million to help service the WA operations.

Lindsay adds that the company is also planning a Sydney distribution hub.

"Subject to final approvals we expect the project to complete in 2020, significantly increasing cold storage capacity and delivering first-in-class driver accommodation, workshop facilities and bulk fuel storage."

At the same time, the company’s Lindsay Rural division recorded a 12.1 per cent fall in profits to $3 million following lower revenues from its operations in the Wide Bay-Burnett region, due to adverse weather conditions.

Kim Lindsay says the company will focus on diversifying its horticultural portfolio to mitigate this risk – citing success with its operations in Mareeba, Brisbane and Adelaide all delivering double digit revenue growth.

The company also bought a new distribution facility in what it called "the major horticulture growing region of Bowen, Central Queensland," in July.

Lindsay says he is confident the company will deliver growth for shareholders in the year ahead.

"With our recent capacity additions, technology upgrades and strategic investments, we expect to deliver net profit after tax growth in the region of 10-12 per cent, subject to no adverse weather and unforeseen events," he says.

"The current drought conditions in some parts of regional Australia are not expected to have a material impact on future earnings."

 

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