- 01Revenue hit $1.07b (+26%); EBIT rose 38%.
- 02After a $250m network build, focus shifts to asset returns.
- 03Woolworths deal expands freight; rural sales grew 15%.
Lindsay Australia (ASX: LAU) is shifting its emphasis from network expansion to extracting higher returns from existing assets after annual revenue exceeded $1 billion for the first time.
At its annual general meeting, the transport and rural services group outlined revenue of $1,072 million for 2025-26, up 26.2%, and record underlying earnings.
Underlying EBIT increased 37.7% to $60.4m, while reported profit after tax rose 31.5% to $22.9m.
The next phase centres on improving freight network utilisation, expanding into secondary freight, and growing integrated rural services despite softer consumer demand.
Major Network Build
Chief executive officer Clayton McDonald told shareholders the major network build was largely complete following substantial investment in fleet, facilities, and targeted acquisitions.
Over the past three years our strategy has focused on Grow the Network, Transformation and Performance, and Sustainability,” Mr McDonald said.
“Going forward our strategy remains directionally the same, but with the major network build now largely complete, our focus is shifting from building the network to extracting value from it.”
The group invested more than $250m in fleet and property over five years, including more than $90m in long-life rail assets, with the major property and rail investment cycles now complete for the medium term.
Transport revenue increased 32.9% to $763m, supported by the first full year of SRT Logistics, with integration delivering $1.5m in cost synergies and allowing $5m of capital to be redeployed, although competitive pricing, smaller orders, and flat volumes continued to pressure margins.
New Freight Market
Lindsay is entering secondary freight through a five-year Primary Connect contract to service 40 Woolworths stores between Mackay and Cairns.
Deliveries have begun in Mackay, Bowen, and Townsville, with Cairns scheduled for February 2027 and the final Big W volumes expected in July 2027.
New Townsville and Cairns sites support the rollout, which Lindsay expects to deliver returns above its 15% return-on-invested-capital hurdle.
Within primary freight, management is targeting better returns from existing road, rail and TransBass capacity through improved utilisation, capacity management, and service delivery.
The group added 25 high productivity vehicle combinations during the year, with the larger configurations now accounting for more than 13% of road kilometres travelled.
Rural Revenue Growth
Rural revenue rose 15.3% to $190.8m and underlying EBIT increased 22.8% to $12.2m, supported by cartons, fertilisers, and nutrients alongside a strong citrus and avocado season.
W.B. Hunter lifted revenue 7.9% to $118.9m and underlying EBIT 11.3% to $3.2m, while introducing a new enterprise resource planning system to improve stock and sales management.
For 2026-27, Lindsay expects approximately $57m in capital investment, including $20m for the Primary Connect contract, and is targeting net leverage below two times by 30 June 2027.
Management cautioned that price-sensitive consumers, lower freight volumes, and reduced citrus and avocado yields would affect trading in the first half, although conditions for irrigated horticulture remain favourable.
The full-year dividend was maintained at a fully franked 3.8 cents per share, following a 1.7-cent final payment, while year-end net leverage stood at 1.92 times.
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