Talks underway with annual report refusal to rule out purchases looking precient
Listed K&S Corporation is examining a proposal from linked private entity Scott’s Transport Industries to buy parts of that company.
The inquiry comes two months after K&S reported an annual results loss of $104 million and three weeks before its annual general meeting.
K&S “has received a non-binding indicative proposal (Proposal) from Scott’s Transport Industries Pty Ltd (STI) for the acquisition of certain assets of the business of STI”, it says in a stock exchange statement.
“The Proposal from STI is not yet in a form capable of acceptance by K&S Corporation.
“However, discussions between the parties are taking place with a view to exploring whether a binding agreement can be reached.”
No more details were given.
Despite the tough year, K&S has been upbeat recently on its outlook for the next financial year and did not rule out more company purchases following that of Aero Refuellers a year ago today.
“On a positive note we are still well placed with a sound balance sheet, low gearing and secure customer contracts,” chairman Tony Johnson says in the group’s recent annual report.
K&S continues to review the industry segments in which it operates as well as the ways in which K&S presents its diverse service offerings to the market. K&S aims to position itself within market segments that offer growth, an ability to differentiate, acceptable risk profiles and sound returns on capital.
“K&S has an excellent asset base, geographic footprint, systems and technology, and functional expertise.
“We aim to use those strengths to provide sustained organic growth.
“Opportunities for potential acquisitions will also be closely evaluated within strategic guidelines.”
According to MD Paul Sarrant, Aero Refuellers “has exceeded our expectations and we anticipate that it will provide growth opportunities”.
If agreed, the purchase would follow a similar path to 2013’s purchase of Scott Corporation, another firm linked to late trucking magnate Allen Scott.