Lindsay and Qube post record earnings as container activity ramps up nationally

Despite disruptions in the second half from adverse weather, rail outages and challenging macro-economic conditions, Lindsay has delivered record underlying EBITDA of $92.1 million for FY24.

The result was driven by a 6 per cent lift in revenue to $717.0 million, led primarily by growth in its Transport division's metro operations, as well as an 11-month contribution from its WB Hunter acquisition which accounted for $3.3 million of the underlying EBITDA figure.

Floods and storms, particularly in North Queensland, impacted the group’s regional transport operations. But while the wet weather reduced near-term volumes, Lindsay expects this to result in improved conditions for future growing seasons.

Lindsay points to challenges within the WB Hunter business led by inflationary pressures, rising interest rates, lower consumer confidence and increased competition, which have reduced foot traffic and average basket values.

Comparable full-year retail sales of $74.1 million for the division were down $4.9 million on the previous year, with building and discretionary categories impacted the most.

Despite this, the group says WB Hunter saw a positive trend in converting more consumers to its loyalty programs up 4.6 per cent, making up 20 per cent of all retail sales, which mitigated some of these challenges.

Lindsay Australia CEO Clay McDonald describes the FY24 performance as a “solid result” from the group.

“The result reflects the benefits of operating in different geographies, modes (road and rail), customer segments, and market sectors,” he says.

“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.

“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.”

Lindsay is expecting FY24 trading conditions to remain similar in the current year, although there was a lift in rural sales in the second half while the Transport division saw improved demand in the fourth quarter following a three-year low in the third quarter.

The group is paying a final dividend of 4.9c per share, steady with the previous year.

Qube’s earnings supported by surge in container activity

Qube Holdings, Australia’s largest provider of integrated import and export logistics services, delivered underlying revenue growth of 17.2 per cent to $3.5 billion, leading to record underlying NPATA of $271.2 million in FY24, up 13.2 per cent.

The result was achieved despite Qube facing similar challenges to Lindsay, leading to weaker agri volumes.

But Qube’s Logistics & Infrastructure business unit was buoyed by high volumes of container related activities, including road and rail haulage and container parks, sustained high automotive volumes and a partial period’s contribution from acquisitions completed in the first half of the financial year.

The Ports & Bulk business unit which generated strong earnings growth with most activities delivering growth in line with or ahead of internal expectations.

The result also benefitted from the full-year contribution from the Kalari acquisition completed in FY23.

“Our strong financial performance in FY24, including double-digit underlying revenue and earnings growth, underscores the value of our strategy and the ability of the business to effectively manage ongoing cost pressures, areas of labour shortage and several adverse weather events,” says Qube CEO Paul Digney.

“Pleasingly, all acquisitions announced during the period are expected to contribute both to earnings growth in FY25 and beyond, as well as continued improvement in Qube’s return on average capital employed.”

While Qube expects further growth in its logistics and ports businesses in the current year, the group warns that this will be at a more subdued rate, pending any unexpected industrial relations-related costs or impacts on operations, as well as adverse weather events and potential changes to the interest rate outlook.

“Having achieved another strong financial performance in FY24, we are well placed to navigate the economic and geopolitical uncertainties ahead and to continue delivering earnings growth for our shareholders in FY25 and beyond,” says Digney.

“The diversification of our business is a key strength, and we continue to see both organic and inorganic opportunities across our key markets and geographies that should support long term underlying earnings growth.”

Qube is paying a final dividend of 5.15c per share.