Thursday 27th June 2019
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TIL Logistics lowered its full-year net profit guidance on increases in temporary staffing costs after its Move Logistics unit relocated to new warehouse facilities sooner than expected.
The New Plymouth-based freight and logistics company now expects net profit of $6.8 million to $7.1 million in the year to June 30 versus prior guidance of $7.8 million to $8.8 million. It reiterated its earnings before interest, tax, depreciation and amortisation guidance of $28 million to $32 million.
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.
The company said revenue in the second half of the year was slightly higher than expected. However, "increases in temporary staffing costs due to the accelerated completion and relocation to new warehouse facilities for Move Logistics have had considerable impact, particularly in May and June," it said.
The relocations were earlier than planned and deliver significant new capacity for the business, the company said.
Other costs associated with timing of repairs and maintenance activity and demurrage costs arising from system issues between TIL and ports have also had an impact. However, the new transport management system currently being implemented by TIL will resolve these issues, it said.
TIL expects to pay a final dividend in line with the interim dividend of 2.5 cents per share.
It also said it has reached a final agreement on the contingent consideration payable in connection with the acquisition of the Move Logistics business in June 2017, with an additional $2.7 million to be provisioned for in the 2019 financial year accounts as a consequence of the earn-out on the purchase in the prior year, it said.
The shares last traded at $1.35 and have lifted 19 percent so far this year.
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