CTI Logistics has released its financial results for the six months ended 31 December 2018.
In a letter to its shareholders, CTI Logistics confirmed profit before tax for the period was $1,751,699, after allowing for the contingent consideration of $2,340,000 relating to the acquisition of Jayde Transport (now CTI Logistics Interstate).
The additional payment arose as the profits of Jayde Transport exceeded initial expectations at the time of acquisition and accounting standards require such consideration to be charged through the profit and loss account, according to CTI Logistics Executive Chairman, David Watson.
“The profit before tax excluding this contingent consideration is $4,091,669, down 9.3 per cent on the previous corresponding period (after excluding the profit on sale of a non-core property of $293,365),” he said – adding that revenue from operations was up 27.3 per cent to $111,804,931.
Watson explained that expansion costs have impacted these results. “These relate to East coast operations in Melbourne, Sydney and Brisbane, the consolidation of our Western Australian regional freight operations, the end of lease closure costs of a warehouse facility and transfer of those clients to a company-owned premises and challenging trading conditions in December.”
During this financial period, Watson said CTI Logistics acquired the business operations and assets of Western Australian regional freight carrier business, Stirling Freight Express (purchase price was $4,500,00).
“Stirling Freight Express provides freight services across the state [WA], operating depots in Perth, Bunbury, Albany, Geraldton, Kalgoorlie, Merredin, and there are agents covering many other regional and rural locations,” he said. “With our existing regional businesses, CTI Freightlines, Broome Freightlines and Bunbury Freight Services, we now cover most of the state and regular scheduled services, and the businesses are being combined to trade under the name CTI Logistics Regional Freight at our new regional freight operation in Forrestfield.”
CTI Logistics aims to focus on cost reduction and productivity initiatives and is looking at expansion, growth opportunities throughout Australia.