By DANIEL RIORDAN transport reporter
Owens Group chairman Norman Geary described his company's annual profit result as "satisfactory" when it was released on June 1, but the way the market has embraced the company since then belies that portrayal.
Shares in the transport group have risen 27 per cent since the result,
from 75c to 95c.
The company posted a $4.6 million profit for the full year, compared with the previous year's $300,000, although last year's result included abnormal costs of $3.6 million (compared with $300,000 this year).
Forsyth Barr analyst Ian Graham said the result was about 10 per cent ahead of his expectations, and probably ahead of the market by about the same amount.
"We're very impressed with their New Zealand operations - they had an excellent second half with ebit margin almost double."
Mr Graham was waiting to see what Mainfreight reported today before assessing where the industry might be headed. He said Mainfreight was trading at similar levels as Owens, on an ebit basis.
But the broking firm isn't recommending clients go overweight in Owens Group. "It's a pretty awful industry. If you're looking for an export volume play, it's much easier to do it through the ports."
One cloud on the industry horizon is the possible removal of the advantage trucking firms enjoy through road-user subsidies. Tranz Rail has been lobbying the Government for what it calls an even playing field, and if subsidies were lowered or removed, or similar assistance provided to Tranz Rail, that would count against firms such as Owens and Mainfreight, said Mr Graham.
Mr Geary said the Owens result had come despite difficult and mixed economic conditions in both New Zealand and Australia during the latter part of the financial year.
Total group revenues were up almost 10 per cent, with growth in Australia and New Zealand roughly comparable.
