MOVe Logistics Group – Full Year Results to 30 June 2021

RESULTS IN LINE WITH GUIDANCE; COMPREHENSIVE BUSINESS REVIEW UNDERWAY For the 12 months ended 30 June 2021 o Results in line with guidance, with year on year increase in sales revenue and EBITDA o Sales revenue up 6% to $353.2m; EBITDA of $61.3m, up 7% on prior year o Net profit after tax of $0.9m reflects inflationary environment, significant project variations, increasing fuel and fleet maintenance costs, as well as non-trading items o Excluding non-trading items , NPAT was up 71% on prior year to $2.1m o Prudent approach to cash management continues and no final dividend has been declared o Refreshed Board and leadership in place, with Chris Dunphy taking up role of Executive Director in July 2021 and Mark Newman appointed as Independent Director o Comprehensive business review underway with goal to drive margin improvement, better utilisation of assets and profitability o Value focused culture with commitment to continually improve safety, customer response, workplace environment, sustainability and shareholder returns. Transport and logistics group, MOVe Logistics Limited (NZX: MOV), has reported its financial results for the year ended 30 June 2021, announcing an increase in revenue and EBITDA and the commencement of a comprehensive business review led by new management. Group revenue was up 6% on the prior comparative period (pcp) to $353.2m, with the continued economic recovery in New Zealand driving activity and demand across a range of sectors which are important sales areas for MOVe, including residential construction, infrastructure, food & beverage and agriculture. Earnings Before Interest, Tax, Depreciation and Amortisation and non-trading costs (EBITDA) of $61.3m was 7% ahead of the prior year and in line with guidance. Group EBITDA margin remained flat at 17% with revenue gains from increased warehouse capacity and specialist haulage project work offset by increasing wage and fuel costs, higher fleet maintenance costs and significant project variations. Four of MOVe's five divisions delivered increased revenue and EBITDA, with a slight decrease in the International division which has been affected by supply chain headwinds and Covid-19 restrictions. The significant turnaround programme for the Freight division continues, focused on improving utilisation and margins. Net profit after tax was $0.9m including non-trading and impairment post tax costs of $1.2m. These were associated with a discontinued IT project, joint venture impairment and an acquisition which was not progressed. Excluding these non-trading items, NPAT was up 71% on prior year to $2.1m. A prudent approach to capital expenditure in the post-Covid environment saw spend reduced by 45%, while still maintaining baseline investment in fleet and equipment maintenance and technology. Capex is expected to increase in FY22 as the company resumes sustaining capital expenditure, and investment into fleet upgrades and technology. Cashflow metrics remain positive with net cash generated from operating cashflow increasing to $43.2m as at 30 June 2021. Total borrowings reduced to $70.2m at year end, with $16.2m repaid during the year from cash as well as net proceeds of $8.2m from the mandatory convertible note placed in May 2021. Excluding lease liabilities, net debt decreased to $65.2m as at year end. The company had cash and cash equivalents of $13.2m at period end. New financing arrangements are in place for the FY22 year with ANZ Bank and UDC Finance, providing improved terms and tenure. Chair of MOVe, Trevor Janes, said: "We were pleased to deliver a year on year increase in revenue and profit in a challenging environment, however, we are conscious that our business must and will do better. We are now taking bold steps to ensure our business is fully optimised and strongly positioned for the future. Led by newly appointed Executive Director, Chris Dunphy, a comprehensive business review is underway. This will lead to a clear strategy that unlocks the potential of our business, delivers value for all stakeholders and positions MOVe as the preferred transport and logistics provider in New Zealand." Business Review Underway The Board and leadership of MOVe were refreshed in July 2021 with the appointment of experienced transport and logistics sector executives, Chris Dunphy and Mark Newman, to the Board. Chris took up the role of Executive Director in late July 2021 and has commenced a comprehensive business review. Three immediate priorities have been identified to drive margin improvement, better utilisation of assets and profitability - to turn around and reset the Freight division; to define, invest in and deliver an attractive multi-service solution for contracted clients; and to optimise the property footprint to service client demand. The company will be moving forward with a value focused culture and a commitment to continually improve safety, customer response, workplace environment, sustainability and shareholder returns. Outlook Margin improvement and growing shareholder value remain priorities for the Group. While the current momentum in the domestic economy is expected to continue, supply and capacity constraints could temper growth in the short term. Continuing disruption is expected on supply chains from Covid-19 in FY22, with lockdowns, shipping constraints and Port closures and congestion affecting the import and export of goods from New Zealand. Inflationary pressures are now looking more persistent, with increasing wage costs and the continuing challenge of driver shortages in the transport industry. Private and public investment, as well as consumer demand and Government spending, is expected to drive demand in certain sectors such as construction and infrastructure. MOVe will be targeting those sectors that offer value accretive opportunities for the business. Executive Director, Chris Dunphy, said: "We believe there is significant potential in the Group. Our timing is good to shake things up and position our business for a future as an integrated supply chain provider in New Zealand. "A comprehensive 90-day business review is underway to reset the business and define a clear strategic pathway that will deliver on our priorities of margin improvement, better utilisation of assets and profitability. We will be brave in identifying our weaknesses as well as our strengths and doing what is needed to make MOVe a stronger, leaner and more profitable business. Essential to our success is our commitment to delivering value for our people and our customers and reducing our impact on the environment." An update, including the outcomes of the business review, will be provided to shareholders at or before the 2021 Annual Meeting. ENDS End CA:00377957 For:MOV Type:FLLYR Time:2021-08-26 08:31:04