McAleese continues restructure of Cootes and secures contract

McAleese Limited has announced it secured a new five-year agreement with Origin Energy commencing on 1 July 2014 for the provision of transport services for LPG nationally. The deal is said to be worth around $7 million in revenue per annum, but represents a reduction of approximately 50 per cent of the previously contracted volume with Origin.

In related news, the restructure of Cootes Transport is progressing with the stated aim of the reduction in the active fleet of prime movers and tankers from 960 to 460 units and a reduction in total Cootes Transport workforce from 1,150 to 470 people.

“We are pleased with the traction being gained on stabilising business performance through targeted initiatives in each of the businesses,” said McAleese Managing Director and CEO Mark Rowsthorn.

“The ramp up of tonnage for bulk haulage is now being consistently achieved, sale of non-core assets is progressing, cost reductions in Heavy Haulage & Lifting are being implemented and we have largely exited unprofitable oil and gas segments.”

Rowsthorn said McAleese would be able to achieve stable business performance during the first quarter of FY15, even though the company recently uncovered what may be a shortfall in employee superannuation payments dating back to a period prior to the company’s purchase of Cootes Transport in April 2012.

 

While the company said it had at all times paid superannuation in accordance with relevant Enterprise Agreement(s), a company-led review of superannuation costs has indicated a possible underpayment of employee superannuation in the Cootes Transport business, which pre-dates the acquisition of Cootes Transport by the McAleese Group.

McAleese said that the superannuation matter was technical in nature and relates to changes made to legislation and Australian Tax Office guidelines regarding what constitutes the earnings base for calculating superannuation.

At this stage no liability has been determined but the amount could be in the range of $5 to $10 million.

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