MOVE Logistics Group (ASX:MOV) executives told investors that the company is seeing improved momentum from its transformation program despite continued weak demand across New Zealand’s transport and logistics market.
Chief executive Paul Millward, joined by CFO Lee Banks, said the first half reflected “a particularly challenging six-month period” as economic headwinds reduced freight and warehousing demand. Even so, management said structural changes made over the past 18 months are beginning to show through in earnings, margin, cash flow, and debt reduction.
Market conditions and first-half performance
He described a competitive environment in which subdued volumes have driven “increased competitor activity,” including what he called “unsustainable pricing by some market participants chasing share.” Millward said management has stayed focused on price discipline while working to add value through service.
Despite the revenue decline, management said profitability trends improved. Millward reported that Normalized Earnings were up 98% year-on-year, including positive Normalized Earnings in the second quarter, which he described as the strongest quarterly result since the end of fiscal 2022. He said this improvement supports the company’s expectation of meeting its guidance for “positive full-year Normalized Earnings.”
Progress against the “New Horizons” roadmap
Millward reiterated the company’s four-year “New Horizons” roadmap, introduced in August last year, which outlines MOVE’s pathway to fiscal 2028 through phases labeled “reset,” “step up,” and “stand out.” He said MOVE has “mostly completed” the reset phase and is now moving into step up.
He characterized the reset work as right-sizing the business, optimizing the network, and maintaining a “relentless focus” on cash costs and efficiency. The step-up phase, he said, is focused on delivering customer value, operational excellence, and what he called “smart business growth” to drive earnings and improve financial performance.
Millward also said MOVE is strategically expanding the diversity of its customer base to reduce concentration risk and provide more balance through economic cycles.
Business unit commentary
- Freight & Fuel: Millward said the division delivered positive normalized earnings for a second consecutive half-year and is benefiting from reset initiatives. In a low-demand environment, he cited productivity improvements, better utilization, customer satisfaction progress, and a reduced cost to serve. He said market rates remain “very tight” and demand is low, creating a challenging outlook. He acknowledged some customer attrition but said MOVE is remaining disciplined on pricing. Operationally, he described January as soft due to weather-related disruption, with February improving and several large seasonal projects expected across multiple sectors. He also noted the company had secured a large materials customer beginning “this month,” covering port movements, coastal shipping, storage, and South Island distribution, and said the Z Energy partnership continues to perform well.
- Warehousing: Millward said the team has right-sized the network, implemented cost controls and productivity initiatives, and invested in leadership at key sites. However, he said the sector is struggling with excess capacity and “irrational short-term pricing behavior.” He also said customers have reduced stock holdings due to lower consumer demand and some have shifted back to just-in-time models. He described the contracting environment as a “buyer’s market” with longer decision cycles. The company’s focus is on customer value through its team, locations, and access to its freight network, while working to increase market share and fill warehouses. Millward said the division is in the “very early stages” of a turnaround and still has work to do.
- Specialists: Millward said the project-focused business had a lighter first half but expects “several large projects” in the second half, with activity commencing well in recent months.
- International: Millward said the division delivered a positive result, with the Oceans trans-Tasman shipping service moving into profit. He said this validated the move to a new larger vessel and a time-charter model. He added that the business has a core group of contracted customers using most capacity, and a new cornerstone customer is being onboarded.
Financial results: margin, cash flow, and debt
Banks said income for the period fell 5% to NZD 143.7 million, consistent with subdued customer activity. However, he said both earnings and gross margin percentage improved due to cost discipline and efficiency initiatives.
He reported that net loss after tax was “close to breakeven,” representing an NZD 8 million year-on-year improvement. Operating cash flow was NZD 17 million, up NZD 8.1 million from the prior year. Banks said working capital discipline and the sale of surplus assets supported a NZD 6.2 million reduction in net debt to NZD 12.8 million.
On costs, Banks said operating expenses fell NZD 9 million year-on-year, driven largely by “continued structural cost resets.” He broke out approximately NZD 6 million in labor savings and NZD 3 million in other operating cost reductions. Transport costs as a percentage of freight revenue were down 3.5 percentage points year-on-year. He said gross margin percentage increased 1 percentage point year-on-year to its highest level since 1H23, and argued the improvements increase operating leverage and position the company for further margin expansion as volumes return.
Banks also highlighted financing changes, saying the board continues to monitor capital requirements and balance sheet flexibility. He said MOVE agreed a term sheet for an invoice finance facility with BNZ to commence 30 November 2026, replacing Pacific Invoice Finance. He said the change will “significantly reduce” the cost of debt and return MOVE to a two-bank partnership with ANZ and BNZ.
Outlook and priorities
Millward said economic conditions are expected to “gradually recover during 2026,” but he added that MOVE has not yet seen meaningful improvement and demand remains subdued. As a result, he said the company is maintaining tight controls over costs and working capital while focusing on “winning in the market.”
He identified growing sales as a key priority, including increasing share from existing customers, securing new business wins, and expanding the customer base across more sectors. Millward also emphasized that rebuilding the warehousing business remains a priority.
No questions were asked during the call, either via phone or webcast, and management closed by reiterating confidence that operational progress is translating into improved performance, while acknowledging the ongoing challenges in the broader market.
About MOVE Logistics Group (ASX:MOV)
MOVE Logistics Group Limited, together with its subsidiaries, operates as a freight and logistics company in New Zealand. It operates through five segments: International, Specialist, Freight, Contract Logistics, and Corporate. The company offers freight services for general freight, less than a container load, full truck loads, household relocations, containerized and bulk lots, temperature-controlled goods, non-hazardous and dangerous liquids, project cargo and heavy haulage, and specialized equipment; and logistics and warehousing services, including picking and packing customization services for individual orders, intelligent warehouse management systems, 4PL consulting services, custom solutions, consultancy services for service improvement, and managed warehousing services.
