By NZPA
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Monday 25th November 2002 |
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The company said it would make no interim dividend after posting a half year result to September of $505,000 compared with $2.6 million last year.
Total revenue fell to $204.5 million from $220.9 million, and earnings before interest, tax, depreciation and amortisation (ebitda) were $7.1 million compared to $10.4 million.
Owens Group chairman Norman Geary said a decision had been taken to focus onto its core logistics and supply chain solutions business. At the moment, the company was too diverse and its business was not well understood by the market.
It was also considering divesting its non-core activities, and making acquisitions in its core areas of international freight forwarding, contract warehousing, road and other domestic transport, and shipping agency services throughout the Pacific.
"We believe that organic growth and acquisitions could more than double the size of our existing core business. We intend to aggressively pursue acquisitions in our core activities to achieve more critical mass."
One activity that might be considered non-core was Hirepool, a "high-performing and sizeable business that could be sold for full value", Mr Geary said. Any such sale would need shareholder approval.
With regard to the half year results, Owens' chief executive David Ritchie said the first half was historically lower than the second half with the exception of last year.
He said there were several factors involved in the downturn , including a lag between the completion of several large logistics projects in Australia and the Pacific Islands and the commencement of new projects.
Other factors had been a particularly adverse winter weather which had affected the rural transport business; lower commodity exports out of Australia affecting the ships agency business; and continued restructuring within the international shipping industry.
The board expected to declare a dividend for the full year, he said.
Changes which would impact positively on the second half included the recent purchase of a major freight logistics contract for a magnesium project in Queensland, which should generate revenue over the next two to three years of $A35 million ($NZ39.68 million) to $A40 million for the group.
He also expected more revenue from the transportation and warehousing of dangerous goods in New Zealand.
Mr Ritchie expected the full-year profit would be around the previous years result, before taking into account surpluses from the sale of any non-core activities.
"Whilst we have been disappointed with the business performance from our Australian businesses over the early part of the financial year, the significant changes in management and refocusing of the business over the past few months are starting to positively impact the results."
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