Transport and logistics group Move Logistics has downgraded its full year profit outlook as Covid-19 and economic pressures continue to disrupt its trade and planned improvements.
Move Logistics executive director Chris Dunphy Photo: Supplied
The company expected to make an underlying profit of between $53 million and $56m for the year ending in June, which compared with an earlier expectation that it would be more in line with last year's $61.3m result.
It said in a market statement it continued to focus on its core freight and contract logistics business as the primary the primary drivers of future earnings, and was considering the sale of its specialist and lifting business after receiving unsolicited offers to buy.
"The focus on margin improvement continues to be a priority," it said, but noted there had been a number of setbacks to its reset plans.
"In the second half of FY22, the New Zealand logistics sector continues to be impacted by Covid, labour shortages, supply chain disruption and cost inflation," it said.
"Continuing global supply chain disruptions have led to a delay in Move's asset replacement programme, with lead times for the delivery of new trucks significantly extended.
"This is resulting in increased maintenance costs on existing assets. Operating costs, particularly fuel, parts and labour, have increased with inflation, with some offset following the pricing review and re-set undertaken by Move in the first half of the year."
However, it said some aspects of its plans were progressing.
"Execution of the business turnaround programme, which commenced in August 2021, is otherwise progressing well with a comprehensive strategic review, new leadership team, $40m capital raising, new banking facilities and a business restructure all now completed."
It said it would continue to invest in technology, particularly a new transport management system, as well as an assessment of a coastal shipping opportunity, which was part of its multi-modal strategy, vehicle upgrades and rationalisation, and improvements to its freight division.
"While the turnaround is taking longer than anticipated, we remain confident of realising significant benefits of the re-alignment for the business in the coming 12 months and beyond," Move executive director Chris Dunphy said.
"Move is now a stronger business, led by industry experts and with a robust balance sheet to support our growth strategy."
