The financial results for K&S have been published, the first since the formerly Scott-owned businesses have been included in a single entity. The net profit after tax for the past financial year was $13.3 million, up 49 per cent on the previous year. Revenue for the year was just under $700 million, up nearly 20 per cent for the enlarged corporation.
In the results published the cost of integrating the Scott Corporation into K&S was set at $1.3 million, but this was offset by an income of $1.7 million from recovered funds related to the fraud perpetrated on the company between 2007 and 2014. In this case, two former employees have been arrested and charged by Victoria Police. The fraud was discovered and made public by K&S back in February.
The company says the synergies achieved from the integration of Scott Corporation into the business have exceeded expectations. Full integration of all systems will be achieved in the current financial year.
While the company’s New Zealand business has been doing well, revenue up to $63 million, the West Australian operations have been going the other way. As a result, cost cutting and rationalisation of the resources-based WA operation is taking place. The main K&S base in the state has moved to Hazelmere to reduce property leasing costs.
According to the report the closing of the Alcoa facilities at Port Henry and Yennora did adversely effect the business but some compensation was found with the award of a logistics contract with Alcoa at Portland.
Another significant development for K&S this year was their acquisition of Norther Territory Freight Service (NTFS). This has given the company a much larger footprint in the freight service marketing and out of Darwin and into WA”s North West region.
Prospects are not improving any time soon, according to the report, with WA continuing to falter. Coal volumes in NSW are also being interrupted and K&S operations on the Eastern Seaboard are reporting lower profitability. As a result, predicted profits for the first half of the financial year are likely to 75 per cent down on the same period last year.