K&S posts record first half performance

Momentum building up early last year on east and west coasts continues but uncertainty keeps Stevenson coy on outlook

February 27, 2013

K&S Corporation bolstered the generally good recent news for transport investors, posting a 37.4 percent rise in first half net profits to $10.1 million.

The result came on the back of an 8 percent rise in revenues for the six months to December 31 of $293 million.

These record performances reflected the continuing solid performance of the Regal Transport operations in Western Australia and better results from the group’s eastern states businesses, according to Managing Director Greg Stevenson.

"We are pleased to see that the improved trading momentum from the second half of the 2011/12 financial year has carried forward into the first half of the 2012/13 financial year," Stevenson states.

"This pleasing trend includes our traditional eastern states businesses, although challenges remain in our rail and road line-haul business due to depressed volumes."

The numbers came as $23 million was spent on buying assets, up from $4.7 million previously, and the acquisition of $11.9 million in property, plant and equipment in lease or hire purchase, up from $3.6 million.

Group net debt was lowered 2.7 percent to $64.4 million.

During the past half-year, K&S acquired the business and assets of Bunbury-based, Collare Transport, which has a strong focus on the timber industry in Western Australia with revenues of about $12 million.

Stevenson says the Collare business had been integrated into K&S’s existing Bunbury business and the group expected to see "significant operational synergies" flowing from the acquisition.

Fleet expenses rose a relatively modest $2.4 million on the previous first half to $49.6 million, while those for contractors were up more than $10 million to $90.8 million.

Stevenson sees the current outlook for the domestic economy as uncertain, with Australian manufacturing still in decline and mining activity slowing.

"Providing earnings guidance this early into the current June 30 half is therefore difficult," he states.

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