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Trucker TIL to lift full-year earnings

Trucker TIL says GDP, acquisitions to lift full-year earnings

By Gavin Evans

Oct. 26 (BusinessDesk) - TIL Logistics says full-year operating earnings may increase by 20 percent given on-going growth in the economy and performance expected from recent acquisitions.

Earnings before interest, tax, depreciation and amortisation are expected to climb to between $28 million and $32 million, chief executive Alan Pearson said in notes for the trucking company’s annual meeting today.

The company’s adjusted ebitda in the June year just ended was $26.2 million, after excluding $6.5 million of costs related to the firm’s October listing, $11.6 million of share-based payments and a $1.2 million revaluation of deferred acquisition payments.

Pearson said the company had started the current financial year strongly. It had not seen any impact from lagging business confidence indicators and the government’s investment into the regions could only be good for the business, he said.

“We’re not just riding the GDP escalator up,” he said. “We have strong opportunities to grow our revenue and margins at a rate higher than the sector generally. We’re very aware of the current and future opportunities in the sector and we’re making sure we’re at the front of them.”

TIL shares rose 2 cents to $1.60. The stock is down 20 percent since the start of the year.

New Plymouth-based TIL has more than 900 trucks and operates depots and warehouses in 60 locations. Its Pacific fuel business is one of the country’s largest tanker fleets, while its general freight business includes major brands like TNL, Hooker Pacific and Roadstar.

In July the firm renewed its long-term contract to truck fuel for Z Energy, the country’s biggest fuel retailer.

Earlier this month it agreed to pay $19 million in cash and shares for Specialised Lifting and Transport. The purchase will expand its existing specialist heavy haulage operation and move it into the new business of dedicated extraction, transportation and installation of heavy machinery.

Pearson said the acquisition is a good example of the new services the company is trying to develop across the group.

The firm acquired Christchurch-based Move logistics only last year, he noted, and will add three new warehouses this year taking total capacity to 195,000 square-metres.

Given rising wages and fuel prices, cost control is also a big focus, Pearson said. While the company had previously owned most of its fleet, it is now increasing the number of owner-operators in the operation and leasing trucks rather than owning them outright.

“This results in higher lease costs across the fleet, but we believe these are more than outweighed by other costs saved, and by increased flexibility,” he said.


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