Rental firm CEO resigns

07 May 2008

Australia: Boom Logistics chief executive officer Mark Lawrence resigned in February, the same month that trading of the company's shares was halted ahead of the company's half-year results. Boom is Australia's biggest crane rental company.

The results included a 22% fall in pre-tax profits, AU$ 2.9 million (US$ 2.6 million) accounting charge relating to the 2005 acquisition of Sherrin Hire, and news that severe flooding in the Queensland Bowen Basin would impact on the company's second half performance.

The company reported a net operating profit after tax of AU$15.3 million ($13.8 million) for the first half of its financial year to December 31, falling to AU$12.4 million ($11.2 million) after the one-off charge. This was lower than the AU$17 to 18 million ($15.3 to 16.2 million) figure it had indicated earlier.

Revenues rose 19% in the six months, however, profits were down 22% because of a “pronounced slowdown” over the pre-Christmas to early January period. In addition, the company said there had been pressure on its margins caused by higher labor, fuel and consumable costs as well as price erosion in some areas, particularly the aerial platforms rented by the Boom Sherrin division. Boom Logistics said it was taking steps to reduce fixed costs and optimize fleet utilization.

John Robinson, Boom Logistics chairman, said, “The underlying Boom business model remains robust, despite the issues that have affected margins during the first half.”

Flood disruption in the Queensland Bowen Basin will, meanwhile, have an impact on the second half results, said the company. It said that disruptions would apply for the whole of the first three months of 2008 and that 9% of company revenues would be affected.

Jack Hebiton, one of the company's founding directors, will take direct responsibility for operations while a replacement for Lawrence is found.

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