Blog

Aug 24, 2023

Kim Lindsay positions Lindsay Australia for billion

Integrated transport, logistics and rural supply company, Lindsay Australia, has

Integrated transport, logistics and rural supply company, Lindsay Australia, has reported revenue growth in its 1H FY2023 results. Meanwhile, long-serving Managing Director and CEO, Kim Lindsay, is preparing for retirement.

Lindsay Australia's half-year revenues of $337.4 million increased $63.5 million (+23.2 per cent) compared to the prior, leading to the growth of 36.2 per cent in underlying earnings before interest, tax, depreciation and amortisation to $42.8 million.

The strong revenue growth and favourable market conditions also boosted underlying profit before tax by $9.7 million (+64.5 per cent) from 1H FY22 to $24.6 million.

The company's ongoing investments in strategic assets and disciplined capital allocation continue to deliver sustainable returns.

Capital expenditure of $21.3 million for 1H FY2023 delivered 27 new refrigerated rail containers, 25 prime movers, 12 trailer sets and other plant and equipment.

For the second half of FY2023 Lindsay Australia plans to make further capital investment of approx. $34.3 million, including investment in road transport equipment and facilities.

Transport's revenue increased by $58.5 million (+29.9 per cent from the prior corresponding period) to $253.9 million, driven by a combination of organic expansion in the road and rail segments (+10.1 per cnet and +11.2 per cnet, respectively) and disciplined diesel price fluctuation recoveries. The division achieved underlying EBITDA of $48.3 million, a rise of $13.5 million (+38.8 per cent) from the prior corresponding period, aided by the impacts of industry consolidation and equipment shortages.

The hybrid logistics model (road/rail) and diverse geographic footprint continue to support long-term value creation.

Rural generated moderate revenue growth of $4.6 million (+5.6 per cent from the prior corresponding period) to $87.0 million, with a larger and more effective sales team driving market share expansion, offsetting headwinds from unfavourable weather conditions.

Rural's underlying EBITDA of $5.1 million was on par with the prior corresponding period.

The division is exploring new markets to expand its geographical reach and continues to assess strategic merger and acquisition options.

"The Group continues to deliver strong year-on-year growth, despite headwinds from unfavourable weather, labour shortages and cost pressures," said Kim Lindsay.

"This highlights the successful implementation of Lindsay's strategic objectives, the robustness of the Group's integrated and diverse business model and the dedication of our employees.

"Demand remains strong in Transport, but we expect some softening of demand in the Rural segment in H2 FY2-23 due to unfavourable weather.

"We are positioned well to continue to grow through greenfield expansions and strategic acquisitions in both the Transport and Rural sides of the business. We remain focused on diversifying the Group's services and footprint to mitigate seasonality and weather risks to continue to deliver sustainable returns and value to our stakeholders.

"Our outlook remains positive for the year and the Company remains on track to deliver FY2023 underlying EBITDA in the range of $68 million – $71 million."

In addition to recently reporting a financial update on the business, Lindsay Australia has also announced Kim Lindsay's plans for retirement which will occur 30 June 2023.

Kim Lindsay worked for Lindsay Brothers Transport from 1974 to 1983 and went on to establish P&H Rural Supplies Pty Ltd in 1983. As Managing Director of PHRS he was responsible for expanding the business from a small local operation to a major regional business, serving as the foundation for the current Lindsay Rural division.

Lindsay has been Managing Director and CEO of Lindsay Australia since the merger of P&H Rural Limited and Lindsay Brothers Holdings Pty Ltd and subsequent listing on the ASX in December 2002.

He, according to the Lindsay Australia Board of Directors, has been central to the growth of the business and has given the company 20 years of uninterrupted and distinguished service as CEO.

"During Kim's leadership, Lindsay Australia has risen to become one of Australia's largest transport companies employing over 1,500 employees," the Lindsay Australia Board of Directors said in a joint statement.

"Kim's time as CEO has also seen Lindsay Australia grow from operating revenue of $144.3 million and EBITDA of $12.3 million in 2003 to revenue of $553 million and EBITDA of $60.1 million in FY2022 and is currently on track for a record year in FY2023 With EBITDA forecast to be in the range of $68 million to $71 million.

"There is no question that Kim will leave Lindsay Australia well-positioned to achieve the Group's significant ambition of reaching annual revenue of $1 billion and EBITDA of $100 million whilst driving shareholder returns over the coming three to five years.

"The board will consider internal and external candidates in its CEO search and has retained a leading recruitment firm to assist with the process.

"After an appropriate break, the board will engage with Kim regarding an on-going non-executive role with the company."

In other news, Team Global Express has signed a $1.8 billion contract with Aurizon.

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