Bumper returns from its booming road transport division has helped Lindsay Australia post record revenue numbers in the last financial year.
Operating revenue was $676.2 million, up 22.3 per cent, and the full-year dividend for shareholders was 4.9 cents per share, up 53 per cent on the returns from 2022.
Now the largest refrigerated transport company in Australia, Lindsay Australia attributed a big chunk of the increase to its transport business, with increased customer demand for freight services in both road and rail.
Transport revenues grew by 29.5 per cent to $513.3 million driven by strong volumes in the horticultural and produce market, and positive consumer demand for fresh, chilled and frozen products.
Lindsay Australia also attributed “industry consolodation” for the bump in earnings. In April 2023, Lindsay “moved quickly” to acquire $22.3 million of assets from the now defunct Scott’s Refrigerated Logistics.
This acquisition included 44 prime movers and 350 used containers and other rail assets.
“The record FY23 performance was an outstanding result for the Lindsay business,” said Lindsay Australia CEO Clay McDonald.
“The transport division led the way with a significant uplift in demand for Lindsay’s road, rail and depot handling services. The team demonstrated exceptional agility, capability and customer service to handle a significant increase in demand.
“This was driven by strong volumes in the horticultural and produce market, industry consolidation and positive consumer demand for fresh, chilled and frozen products.”
In what Lindsay described as “difficult trading conditions”, the rural division grew revenue by 4 per cent to $163 million, however, underlying profit before tax reduced by $1.02 million, or 9.5 per cent to $9.7 million.
“Rural trading conditions were impacted by industry inventory overstocking, global price volatility and inflationary impacts, an ASX statement said.
Lindsay is hoping the acquisition of WB Hunters for $34.6 million in July 2023 will help. WB Hunters operates eight branches across Victoria and NSW and provides Lindsay geographical “diversification” and “additional scale” to the rural business.
Lindsay added that ongoing investment in a modern truck fleet, higher payload combinations and increased use of rail as a mode of transport are also “cornerstone” initiatives being implemented.
“Providing rail solutions to customers represents 25 per cent of transport revenue; however, rail kilometres now exceed road kilometres for the first time in Lindsay’s history.”