Lindsay bounces back after sea change

Lindsay Australia sees its annual net profit rise from the carpet to hit $7.1 million

August 26, 2013

Queensland transport and rural supplies firm Lindsay Australia has seen its annual net profit rise from the carpet to hit $7.1 million.

Last year’s effort of a mere $25,000 came as the firm shouldered bad debts of $4 million incurred when a major customer went into liquidation. This
was dealt with and a revenue rise of $279.6 million plus fuel tax credits of $1.9 million helped power the resurgence.

The transport arm had the lion’s share of revenues, which rose from $177.5 million to $200.5 million, while the division’s profit rose about one-third, from $13.7 million to $20.5 million.

The main drivers of growth were identified as:

  • increased activity out of Brisbane, Sydney and Adelaide
  • growth out of produce areas other than the Bundaberg and Gatton areas
  • additional revenue from taking over work from Charter Refrigerated Transport which left the industry
  • strong growth out of north Queensland, with revenue up 10 per cent

The exit of Charter gave Lindsay diversification in October into the Cairns seafood transport market, a new sector for the firm, as well as adding New South Wales horticulture customers, with the extra business adding $2.7 million during seasonally quiet months from January to April.

At an investors' presenation last month, the company dubbed the new seafood arm 'Lindsea'.

Lindsay broadened its reach this month, opening a Mackay depot in further support of its refrigerated seafood haulage business.

The benefits of growth were shared, with freight carried by subcontractors rose 2 per cent to 27 per cent.

Fleet kilometres rose 3.2 per cent to 52.2 million.

"Higher capacity utilisation and the flexibility provided by use of subcontractors have resulted in this increase in kilometres being lower than the increase achieved in revenue from company vehicles," it says.

Lindsay puts the latter down to continued investment in B-doubles and increased average load factors, while subcontractors costs rose from $34.3 million to $41.8 million

Linehaul labour costs per kilometre rose 8.5 per cent due to more distance travelled and rate increases.

The transport arm has agreed a new three-year enterprise bargaining agreement that has just been submitted to Fair Work Australia.

Vehicle repair and maintenance costs rose 13.4 percent due to distance travelled, higher mechanical labour costs and its ageing fleet.

Increased business has appeared to lead to higher pallet charges, which rose from $1.4 million to $1.9 million

Lindsay also took a hit from an "unacceptably high accident rate" leading to increased insurance costs and claims that came to more than $1.5 million.

This has led to action including a fleet management system upgrade and the trial of in-vehicle tracking monitoring and communications systems to allow for better fatigue management monitoring.

"The outlook for produce volumes in the 2014 year remains encouraging with a possible industry-wide capacity shortage in [the] refrigerated transport sector and further rationalisation with either operators downsizing or exiting the refrigerated sector," the company says.

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