Update on Trading and FY19 Guidance
New Zealand freight and logistics company, TIL Logistics Group Limited (NZX: TLL), has today provided updated guidance for the year ending 30 June 2019 (FY19).
TIL expects that EBITDA for the FY19 year will be in line with its previous guidance of $28m to $32m. NPAT (before contingent consideration and associated costs, discussed further below) is expected to be around $6.8m to $7.1m.
Revenue in the second half of the year has been slightly up on expectations as TIL brings on new customers and provides a wider bundled transport and logistics offer to existing customers.
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. The relocations were earlier than planned and deliver significant new capacity for the business. 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.
Despite widespread reports of softening in the economy, the Board of TIL remains confident in the company’s prospects with continuing demand for its services, including several new multi-million dollar contracts due to start in FY20. Growth opportunities have been identified in all the TIL operating divisions – Freight, Warehousing, Bulk Liquids, Specialist and International.
Given this, the Board confirms that it expects to pay a final FY19 dividend in line with the FY19 interim dividend of 2.5 cents per share.
TIL also advises that 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 $2.7m to be provisioned for in the FY19 accounts as a consequence of the earn-out on the purchase in the FY18 year.
The MOVE Logistics business has been a valuable addition to the TIL portfolio and TIL looks forward to continuing to build on its potential.