MaxiTrans finds economy provides rocky road for results


Organic growth and efficiencies give some impetus to annual returns

MaxiTrans finds economy provides rocky road for results
Maxi-Cube is expected to have a boost

 

Trailer and parts firm MaxiTrans sees its bottom line in the red by $17.7 million as market conditions hit both its business segments.

External sales fell 13.9 per cent to $352.5 million as segments covering commercial vehicle spare parts and the new trailer markets saw demand down 5-10 per cent and 15 per cent respectively.

And the group struggles to see a change in the business outlook for the coming financial year.

"It is expected market conditions in the Australian trailer market will continue to be slow as consumer confidence and other macro-economic drivers remain soft and operators continue to age their fleets," it says.

"In the short term, order intake remains consistent, in the food and grocery sectors, benefitting our Maxi-Cube products, whilst the general freight and tipper order intake is lower than the last financial year.

"These product lines are directly affected by the broader economic conditions, the crop outlook and the timing of commencement of new housing and infrastructure projects."


Read about the dolly innovation from MaxiTrans and the ATA, here


In the face of difficult conditions, MaxiParts lifted revenue 4.7 per cent to $133.5 million and gross earnings 15.8 per cent to $11.2 million.

This was swamped by the Trailer Solutions arm, which had a 19.4 per cent fall in sales to $240.5 million and gross earnings down 30.3 per cent to $16.2 million.

"The revenue increase was a result of the continued success in selling an integrated MaxiTrans solution to fleet customers and new product introductions through the retail network, resulting in $1.1m of profitability growth," the group reports.

"Operational efficiency programs drove another $0.4m of incremental gross margin increase. After an increase in inventory at 31 December 2018, inventory within MaxiParts returned to levels consistent with FY18 by 30 June 2019."

Trailer Solutions’ year was the victim of comparison with the previous one marked by the bumper Coles deal.

That aside, revenue declined 2 per cent, despite an "adverse sales mix".

"These impacts were somewhat offset by improved cost of manufacturing and overhead reductions of $2.0m, improvements in rentals, service and NZ business of $2.4m and 6 months contribution of Trout River Australia of $0.7m," the group reports.

"The strategic investment in a rental fleet of trailers has been successful, achieving an annualised post tax return on invested capital exceeding the assessed weighted average cost of capital. Average fleet utilisation remained above 70% with a net $3.7m invested in the fleet by the end of FY2019."

"MaxiTrans has experienced a difficult year and recognises the pain this is causing our shareholders," chairman Robert Wylie says.

"In closing out the second half we have strengthened our balance sheet position and the manufacturing operations are now operating well.

"Looking ahead, while the end markets for trailers and parts are challenging, we are in a much better position to respond when conditions do change."

 

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