Transport group gears up to halt share price slip

By ROB O'NEILL

With a share chart that looks like a down escalator, it is perhaps not surprising that transport operator Owens Group is doing some soul-searching.

The company's share price has slid from a high approaching $1.50 in the middle of last year to a new 52-week low yesterday at $1.07.

But just as the company logged that milestone it announced significant additions to its board and a new growth strategy based around targeting niche high-margin business opportunities.

"I guess you can say the company has gone through a period of lack of growth," said chairman Norman Geary yesterday. "There's been some restructuring and we appointed a new chief executive, Ian Newman, last August."

Mr Geary said a review of the company's activities had resulted in a restructuring of its refrigerated container business.

At the same time, strategy had been reviewed. An advisory board, which included BNZ chairman and Comalco managing director Kerry McDonald and transport specialist Roly Hoy, surveyed market opportunities and targets for growth.

As a result, Owens Group is about to expand into niche markets in Australia.

Yesterday, the company said Mr McDonald and commercial lawyer Denham Shale, who specialises in mergers and acquisition, would join the board.

"I guess you would say in the past, although Owens was a big transport company, it was seen as a private public company," Mr Geary said.

"Now we've introduced outsiders with track records and experience. We know we've got to build the business and we've set about it."

Owens Group has a range of businesses in Australia, including container parks, road haulage and freight forwarding. It also owns a tank-cleaning business called Hyde Park Tank Cleaning, bought last May.

That acquisition could be the model for future activity, said Mr Geary. The line-haul business itself was competitive and "pretty profitless."

New businesses would be based around serving the line-haul operators rather than being one, he said.

The company had also been investing heavily in new information systems to deliver integrated logistics management.

It had spent "many millions of dollars" on a project with enterprise resource planning software provider JD Edwards to build new accounting and planning systems.

"What the market will see as the year progresses is an Owens Group that is significantly different and more aggressive," Mr Geary said.

Do not expect to see the results in this year's annual report, though. Mr Geary characterised the report, due in May, as "one of restructuring and positioning ourselves for expansion in the new financial year - the year we are just entering."