Move Logistics Group Ltd

The fund manager continues to hold MOV (Movus), noting FY23 results were as expected for a business in turnaround mode facing challenging macro conditions, with revenue, EBIT, NPAT, and free cash flow all declining year-on-year. The manager is focused on the new CEO Craig Evans's Project Blueprint strategy, which is split into two phases: first reshaping and strengthening the business through fleet rationalisation, new IT software, improved pricing, and better branch-level accountability; and second driving organic growth through LCL freight, a capable sales function, and collaboration with other logistics companies. The manager believes early signs of financial improvement are visible in a 150 basis point EBITDA margin improvement in the freight division in the second half versus the first half of FY23.

The fund manager continues to hold Movus (MOV), noting the H1 FY24 result swung to a significant net loss after-tax due to reduced revenues, one-off shipping division costs, and right-sizing expenses, though the actual result surpassed the guidance provided a few months earlier. The manager acknowledges the tight balance sheet with net debt of $16.9 million against an EBIT loss of $8.6 million, and the challenging New Zealand recession backdrop. However, the manager counters that MOV paid down debt in H1 FY24, is transitioning to a capital-light owner-driver model, and expects significant improvements from H2 FY24 as Project Blueprint initiatives, including the FuseIT transport management system, begin to take effect. The manager believes MOV's network capacity is two to three times current revenue, providing strong operating leverage as volumes recover.