Weak economy takes toll on Allegro’s Team Global Express with $190m loss

Team Global Express CEO Christine Holgate. Picture: John Feder

Team Global Express has posted a $190m loss for the year ended March 31, according to accounts lodged with the Australian Investments and Securities Commission, as a soft retail sector and higher fuel and staff costs continue to hurt the broader logistics industry.

The result for the company, run by former Blackmores and Australia Post boss Christine Holgate, compares to a $163m loss in the previous corresponding year and came despite a lift in revenue to $2.95bn from $2.8bn in the previous corresponding year.

TGE reported earnings before interest, tax, depreciation and amortisation for the year to March of $151m and at least $70m of cashflows before taking into account the one-off separation and non-recurring transformation costs.

However, net reported cash from operating activities reduced significantly in the current financial year to a $5.9m outflow, compared to a $95.3m inflow in the previous corresponding 12 months.

The accounts, which are for the Australian operations and exclude its New Zealand business, said since TGE was sold by Toll Holdings, the group has incurred over $200m of spending on IT separation, rebranding and the settlement of acquisition liabilities.

“The company is well positioned to continue to fund its operations with a history of generating positive operating cash flows net of material one-off separation activities that have now been completed, coupled with undrawn facilities,” the company’s accounts said.

TGE provides express parcel, freight delivery and domestic forwarding services in Australia, and transport and contract logistics services in New Zealand.

The biggest cost to TGE was direct transport and logistics costs at $1.5bn and employee benefits at $900.8m, with the group agreeing to pay staff increases in line with inflation.

It has $702m of total current liabilities, including $192m of loans and borrowings.

The business has $421m of accumulated losses and total negative equity of $275.8m.

It comes at a time higher staff costs and fuel costs are hurting the Australian logistics industry, while consumer retail spending remains subdued.

TGE was purchased in 2021 by Allegro Funds from Japan Post out of Toll Holdings for $US10m and renamed from Toll Global Express to Team Global Express, with Allegro recapitalising the company with $500m.

The company was loss-making at the time, and Allegro’s plan has been to turn the business around.

However, there have been reports Allegro has made efforts to sell the group since its purchase through investment bank UBS.

Sources say one buyer of the group could be its intermodal customer Aurizon.

In the past, the company was hamstrung by complex systems.