MaxiTrans to press on in troubling economic times

Wylie voices concern at customers’ lack of confidence in economy

MaxiTrans to press on in troubling economic times
MaxiTrans expects Trout River to help


Trailer-maker MaxiTrans will stay the course despite the country’s intense drought hitting grain-trailer demand and softening general economic conditions, chairman Robert Wylie pledges.

And Wylie uses the annual general meeting’s chairman’s address to paint troubling picture of the economy in general.

With the last annual results underlining "a difficult year", Wylie detects an unwillingness to invest amongst many customers until their positions become clearer.

"The severe drought conditions clearly impacted our agricultural products and, while there is a lot of talk about infrastructure, our customers in this segment are not purchasing capital equipment either, as they wait for activity in these projects to increase.

"Overall we put the market conditions down to a lack of confidence in the economy and our customers – particularly the smaller ones) are not convinced that low interest rates or tax incentives are initiatives that will encourage investment.

"The Australian trailer fleet continues to age.

"This time last year we thought that this trend was about to reverse, however, that has not eventuated.

"The decision not to pay a dividend was driven by a combination of heavy TRANSform Capital expenditure over the prior year and weaker trading due to the challenging economic environment."

Wylie sees nothing in the MaxiTrans business outlook supporting Reserve Bank hints of better times ahead, saying that, at this time, "we do not see any signs of change to current difficult market conditions".

Read what the annual results brought the company last financial year, here

Part of the argument for staying the course is the silver linings in certain segments.

"MaxiParts continues to grow in strength and demonstrates itself as a first class distribution asset representing 49 per cent of Group segment profit after corporate allocation," Wylie notes.

"This growth goes some way in offsetting the softer order intake for new trailers being experienced during this downturn.

"Moreover, we can be further confident in relation to the introduction of Trout River Live bottom trailers into the group – expanding our portfolio of market leading brands and meeting our internal expectations since acquisition.

"As self-regulation increases within the infrastructure sector, it is resulting in greater demand for safer solutions, such as that provided by live bottom trailers."

Options for growth are discerned in New Zealand "where the sale and leaseback of our facility in Auckland will facilitate the expansion of our service capacity and potentially facilitate the future creation of a more efficient production capability. Our Christchurch service business also continued to grow."

An operational hindrance for the company has been issues with the company’s new enterprise resource planning (ERP) system, completed late and at greater cost and time than had been foreseen, not least due to expert advice that was later "shown to be wrong".

A new system "essential", as the previous one was outdated and had its own risks, and final module is to be tested and implemented "mostly" during this financial year.

On the plus side for operations, efficiency is reported as improving 7 per cent over the network – with particular mention made of the Ballarat plant and New Zealand operations – and there was a 48 per cent reduction in recordable injuries.


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