Move Logistics Group Limited Analysis

Overview

Move Logistics Group Limited joined the NZX on 7 December 2017, following a reverse listing with Bethunes Investments Limited. The full details of this transaction can be found on the company website www.til.kiwi.

Move is one of New Zealand's largest private domestic freight and logistics platforms, with a nationwide network of branches, depots and warehouses. Its activities include transporting and warehousing freight throughout New Zealand and co-ordinating freight movements offshore through international alliances. It also has a specialist road tanker division which is the single largest operator in the New Zealand fuel delivery market.

Performance

The following information was extracted from Move Logistics Group's Full Year Results, released 29 August 2024:

Transport and logistics group, MOVE Logistics Group Limited (NZX/ASX: MOV), has released its audited results for the year ended 30 June 2024.

• Group performance and results below aspirations; significant improvements being targeted in FY25 with new leadership and fast-tracked change programme
• Revenue down 13% to $301.7m as a result of lower market and customer activity
• Net loss after tax for the year of $(48.1)m , including pre-tax, non-trading adjustments of $19.7m
• Normalised EBITDA of $27.6m, and Normalised EBT of $(25.7)m
• Reduction in net operating cashflow (including rent and leases) to $(5.1)m

The results reflect underperformance of the Group, exacerbated by the recessionary environment which impacted customer demand and further highlighted the need to right-size and improve efficiencies within the organisation. A group wide change programme has been developed and is now being executed at pace to drive financial improvement.

Chair of MOVE, Julia Raue, said: “MOVE’s results this year are clearly disappointing. We acknowledge that we were too slow to react to the recessionary environment which has been stronger for longer than expected, and reduce costs to match activity levels.

“We are now moving urgently to drive change and improvement. We have engaged with independent advisors to ensure we have validated the challenges and opportunities within the business as well as the external factors that have impacted MOVE’s performance. A comprehensive change programme has been developed to replace Project Blueprint and experienced executive, Paul Millward, has been appointed to lead the turnaround. We are moving ahead with a refreshed Board and leadership team and are united in our focus to execute the change programme with urgency.”

FY24 Financial Performance

Subdued customer activity and customer losses in a recessionary environment saw revenue reduce 13% year on year to $301.7m. Costs increased as a result of inflation and following 1H24 investment in the business in anticipation of an economic recovery.

The result includes non-cash impairments of $17.3m on the carrying value of the Atlas Wind vessel which is being held for sale and goodwill in the warehousing business. Excluding these and other non-trading costs (totalling $19.7m), Normalised EBITDA was down 41% to $27.6m, primarily as a result of lower revenue and costs being too high for activity. In line with guidance, 2H24 Normalised EBITDA was ahead of 1H24. Including non-trading costs, the company has reported a Net Loss after Tax of $(48.1)m.

The priority for the Board is to restore positive adjusted net operating cashflow (inclusive of rent and lease payments), which was $(5.1)m in FY24.

Net debt increased by $1.4m to $17.0m, with total bank debt of $36.0m (inclusive of $9m bank guarantees). MOVE is finalising new funding arrangements with ANZ Bank and Pacific Invoice Finance which will support the change programme as well as corporate and working capital requirements. Total equity was $23.4m as at 30 June 2024.