Silk has eye on organic growth, larger footprint in FY2023

Silk Logistics reports revenue growth across all service lines in the current financial year.

Despite significant challenges of the Covid pandemic, global supply chain issues and labour shortages, Silk Logistics Holdings has achieved outperformance against all metrics in FY2022.

The company has reported revenue of $394.7 million, which is a 22 per cent growth over FY2021.

Compared to the previous financial year it has also reported underlying earnings growth of 16.2 per cent, underlying NPAT growth of 45 per cent, and underlying free cashflow improvement of 37.5 per cent.

Silk has seen revenue growth across all service lines in FY2022, maintained its margins in challenging industry and market conditions, seen expansion into e-commerce, increased its warehouse occupancy, seen rapid growth in distribution revenue, and an ongoing growth in container volumes.

It has reported new annualised business wins of $46.6 million, renewed customer contracts worth $27.6 million, and recurring contracted revenue of $186.9 million.

The company has seen some key acquisitions in the past year, and it now has 47 operational sites strategically located in all major Australian capital cities.

“We remain focused on organic growth opportunities and are building a longterm strategic pipeline to support the development of new facilities,” said Brendan Boyd, Managing Director & CEO of Silk Logistics Holdings.

“This includes the Kemps Creek site, on which Silk purpose-built warehouses will come online from FY2025, enabling the establishment of a new hub in New South Wales, and creating increased warehouse capacity at reduced operating costs.

“Over FY2023 and FY2024 we expect to add over 115,000 square metres of new capacity, allowing us to further drive organic growth. Our five-year plan features a series of time horizons over which we will continue to strengthen our core service offer, grow our share of wallet and fill gaps in our capabilities. We have new sites and capacity coming online in the near term, in New South Wales, Queensland and Western Australia, that will aid our geographic expansion where we will seek to deploy bespoke technology and automation solutions.

“In September 2022, we acquired Fremantle Freight & Storage Group, a leading Western Australian Port Logistics provider. This acquisition fulfils one of the primary growth targets flagged in our Prospectus and enables us to better service our blue-chip customer base on a national level. We have an exciting pipeline of acquisition targets and expect to continue to expand our service and geographic coverage in the year ahead.”

The near-term focus of the company is on the further integration of 101Warehousing and Fremantle Freight and Storage, implementing new customer sites and developing technology including robotic solutions where appropriate. Its Corporate Development team is also actively seeking further acquisitions.

Silk was recently awarded the ‘Business Services Growth Company of the Year’ for 2022 by the Australian Growth Company Awards.

“This award is testimony to the success of The Silk Way and our performance in FY2022 and should give all shareholders comfort that the Board and management team of Silk Logistics Holdings are delivering,” said Boyd.

Subject to no material adverse change in current economic conditions (including in respect of Silk’s market, customers, suppliers and resources), Silk expects to grow revenue and underlying earnings in FY2023.

SAF-HOLLAND (Aust.) Pty. Ltd

ABN: 79004371215 | Sales: 1300 131 613 Email: sales@safholland.com.au