During the investor call, CEO Mr Clayton McDonald said that with...

During the investor call, CEO Mr Clayton McDonald said that with rural, there may be some downward pressure in FY 24 as rural is already slightly weaker but the outlook for the transport division was better.

Re the acquired equipment from Scotts RF, there have been some teething problems in integration: some equipment is being overhauled.

CFO Justin Green said it was taking time to work through the assets: it's now five months into it, and will continue to evaluate: older assets will be replaced.

The CEO said Adelaide to Perth had a road subcontractor operating for LAU but it was largely rail served.

Capacity utilisation is being reevaluated among the rail fleet: working its way through the ex-Scotts RF acquisition: plenty of demand for the rail offering. Larger road transport trailers (22 pallets capacity if I heard correctly) also a focus.

The W B Hunter acquisition is in irrigated areas of NSW Riverina and Victoria: some components can be 'rolled through' the LAU Rural network, plus a lift in margins, so outlook probably more positive than negative. (This contradicted what I wrote in the first paragraph).

Re demand, LAU grew turnover overnight when Scotts RF collapsed. The bulk of customers have transferred. It is still working to set up contracts: plenty of room for LAU to grow.

The CEO said LAU is a non-discretionary trader (i.e. concentrating on food: horticulture, freezer and chille d goods). LAU is no longer as seasonal as it once was, due to the grocery demand. Volumes are favourable. Justin Green said there's 'stickyness' was created by LAU's network and there was also a 'flight to quality' as clients are conscious of what occurred with Scott's.

From the Scott's acquisition, LAU brought on both new rail and road clients (largely rail).

LAU is continuing to push more into rail.

The labour market remains tight: access to truck drivers and other staff is under pressure. LAU is competitive in pay, but equipment and culture also attracts employees. There's an escalation in labour rates in some rural areas as harder to get employees/ contractors.

The conference concluded at 0935 with the CEO looking forward to another positive year after what he said was an exceptional result.