Lindsay Australia has reported a strong performance in the financial year ending ending 30 June 2024 despite a challenging second half.
In FY24, Lindsay Australia achieved record underlying earnings before tax, depreciation and amortisation (EBITDA) of $92.1 million amid significant disruptions in H2 due to adverse weather, multiple rail outages and challenging macro conditions.
Like-for-like operating revenue grew by six per cent to $717 million, supported by positive performance in the Transport division’s metro operations, offsetting softer regional volumes and sales in the Rural division particularly in North Queensland as weather impacted horticultural yields.
The company announced a final fully franked dividend of 2.8 cents per share, bringing the full year dividend for FY24 to 4.9 cents per share fully franked – in like with FY23 and an increase in payout ratio to 50 per cent.
Lindsay Australia’s acquisition of WB Hunter and its successful integration contributed $3.3 million in underlying EBITDA over 11 months of operations, though performance was impacted by trade, discretionary and weather-exposed categories.
The Transport business’ underlying EBITDA increased by 2.2 per cent to $103.3 million, reflecting robust growth in metro operations and the rail division despite considerable disruptions and challenged performance in horticulture sectors.
The division bolstered its earnings base with new and existing blue-chip customers who provide a steady supply of food staples.
Strategic investments continued to expand the division’s network and asset portfolio, enhancing Transport’s refrigerated capabilities and positioning the business for future growth with greater geographical and customer diversification continuing to reduce market cyclicality.
Meanwhile Lindsay Australia’s underlying Net Profit After Tax (NPAT) decreased by 17 per cent to $30.4 million, impacted by higher net finance and depreciation charges of $10 million, associated to the $128 million in capital expenditure invested over the last two years.
Despite these headwinds, Lindsay Australia continued to invest in its people, network and assets with a capital spend of $52.1 million – building greater operating capacity while still delivering 20.2 per cent Return On Invested Capital (ROIC).
According to Lindsay Australia, its FY24 results highlight the resilience of its diversified operating model, particularly in navigating the challenges of the second half that included over 40 days of multiple rail disruptions on the East/West line and prolonged wet weather, which had the largest impact on Queensland growing regions.
“This is a solid result from Lindsay Australia’s core operations,” said Lindsay Australia CEO, Clay McDonald.
“The result reflects the benefits of operating in different geographies, modes (road and rail), customer segments and market sectors.
“Trading conditions have been challenging, however our exposure to the staple refrigerated food sector, the integration benefits of Rural and Transport and our renowned delivery performance have created value as suppliers focus on ensuring goods are on the shelf to retain customers and grow sales.”
In Q4 FY24, Lindsay Australia also launched an enterprise-wide transformation program to leverage the company’s size and scale to improve efficiency, increase utilisation and reduce costs.
A dedicated project team, led by a newly promoted General Manager, has been established to drive this initiative forward.
Lindsay Australia anticipates that the outcomes of this program will start contributing in late FY25, following resource investments and program development throughout the year.
“The recent wins with blue-chip customers are a direct result of the investments we’ve made in our business over the past several years,” McDonald said.
“Furthermore, we’ve built this platform with additional headroom and capacity, positioning us for continued growth, with operating leverage expected to come through in future years.
“Lindsay is larger, better resourced, more resilient and positioned strongly to continue capturing market opportunities as we move forward.”
In other news, Lindsay Transport has been able to gain an upper hand in safety due to the fleet’s fitment of JOST fifth wheels and sensor technology.
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