Boom Logistics makes strides in pre-half year forecast
By Euan Youdale06 February 2009
Boom Logistics has sought to reassure investors of its strength with a pre-half year financial result forecast, indicating that it will achieve a 2009 operating profit of AU$22 to 29 million (US$14.5 to 19 million).
The projection was made by market analysts and initially reported at the Australian crane rental company's annual general meeting in October. "Recent market announcements and media commentary concerning capital equipment companies servicing the industrial and resource industries have generally created negative sentiment towards this sector. In light of this and to dispel any associated uncertainty, Boom Logistics is providing a market update prior to the release of its financial year 2009 half year (FY09) results," said the company.
The results are released on 23 February 2009. "Whilst recognising that the current economic climate makes forecasting the full year outcome challenging, based on Boom's current visibility over its contract base and project pipeline, management believe that an operating result of between AU$22 and 29 million is a fair measure of the risk profile in the prevailing market conditions."
Boom said the forecast followed strategic improvements to the company and came despite the lower than budgeted crane sales through the James Equipment division of the business.
"Management accounts for the first six months of FY09 demonstrate an above budget outcome and an operating result ahead of the first six months of FY08. The after tax operating result is in the region of AU$13.7 million (US$9 million), compared to the restated FY08 half year result of AU$13.2 million (US$8.7 million)," said the company. Boom's auditors, KPMG, are in the process of reviewing its half year financial statements.
During the half year period, Boom has completed a AU$175 million (US$115 million), three-year revolving credit facility and a AU$32 million (US$21 million) working capital and general transactional banking facility. In addition, strong cash flow reduced the company's debt gearing ratio from 92% in June 2008 to 86% at the end of December.
The positive forecast has also been aided by AU$20.4 million (US$13.4 million) capital expenditure, resulting in a strong improvement in the utilisation levels of the wet hire crane fleet, along with a strengthened management team, added the company.