Company sees likely start of trailer replacement cycle in annual results
MaxiTrans net profits have slipped slightly in the past financial year, even as revenues have busted through the $400 million mark.
Net profit including non-recurring items came in at $10.07 million, down from $10.7 million the previous year, while revenues soared 20 per cent from $340 million to $409 million.
The trailing equipment manufacturer nominated “inefficiencies in the Australian trailer manufacturing operations in the last quarter as well as historical warranty issues that impacted the New Zealand business” as offsetting strong trailer sales for the 5.8 per cent net profit fall.
To an extent, the company has been the victim of a more bullish market and its own deal-winning success, with the combination putting a strain on its operations. But the returns have been particularly good for the Maxi-Cube and Freighter brands.
Amongst the highlights, it underscored “strong sales growth of our Freighter brand products as a result of improved confidence in the general freight sector.
“In addition, the company experienced a better than expected launch of a standard model trailer that can be delivered in a shorter lead time.”
It lauded the performance of new products into the range including tyres, European aftermarket truck parts and North American aftermarket engine parts as well as continued success of the MaxiStock customer inventory management system to drive incremental sales.
A more integrated supply chain was behind a good showing by MaxiParts, now a manufacturing and service facilities supplier.
With the trailer market experiencing a 17 per cent rise last year—the second consecutive year of growth, though one boosted by Coles’ huge order — the company tentatively flags the start of the trailer equipment replacement cycle.
Read more about the enormous Coles trailer contract, here
“Assisted by the order to build 386 trailers for Coles Supermarkets, the Australian trailer business increased its unit sales by 17% and revenue by 25%,” it says.
“The order, regarded as the single largest order in the Australian trailer industry at the time, was completed on budget and ahead of time, confirming the company’s credentials to deliver large‐scale orders
“Since completion of the Coles order, MaxiTrans has also secured a number of other high volume contracts, but not of the same magnitude as the Coles contract.”
Given its broad spread of products, there was bound to be some downside, this time felt by the tippers segment due to the drought. That said, it expects construction demand to keep the decline from “abnormally high sales levels of the prior year” from being heavy.
The company plans to sell its Chinese subsidiary, MTC, putting the move down to margins being hit by “increasing product commoditisation in China and rising input costs”.
It expects “any sale transaction will include a long-term supply agreement for the continuing supply of products to the group by MTC”.
For the future, MaxiTrans is banking on completion of the significant investment in our new IT systems over the next financial year.
“This will be a key enabler to driving operational efficiency through the business resulting in strong operating cashflow in future years,” it says.