The consistent performance of WA freight company Regal Transport has driven a strong first half profit forecast for Mount Gambier-based trucking group K&S Corporation.
K&S announced today it was anticipating its net profit for the first half of the 2012-13 financial year to be up 25-30 per cent on the previous corresponding period.
The forecast follows an improved performance in 2011-12 for the ASX-listed company, whose eastern states operations have struggled as a result of weak demand for its services.
K&S Managing director Greg Stevenson said Regal “continues to make an important contribution” to the company’s overall performance.
“We are pleased to see that the improved trading momentum from the second half of the 2011-12 financial year has carried forward into the first half of the 2012-13 financial year,” Mr Stevenson said.
“Improved performance from our traditional eastern states businesses has also been maintained in the first half of the 2012-13 financial year, although challenges remain in our rail and road linehaul business due to depressed volumes.”
K&S announced a net profit of $16.4 million for 2011-12, an 11 per cent increase on the previous financial year.
The company’s lift in fortunes has come in the wake of K&S expanding its operations into the WA mining and exploration industries, with the acquisitions of Regal and fellow Pilbara-based transport provider Pacific Transport in 2010.
In a further expansion into WA, K&S announced last month that it had acquired Bunbury-based Collare Transport Group for an undisclosed sum.
Mr Stevenson said the Collare acquisition “offers improved earnings for K&S from a comparatively modest outlay and further demonstrates K&S’ ability to identify quality assets that add value to our business.”
K&S shares were up 4.5 per cent to $1.83 at the close of trade today.
