Mitchell said, “Boom Logistics operates in the growing and vibrant resource and infrastructure sector, has a strong asset base and its cash flows are robust. Our rapid growth however, has masked some underlying problems especially to do with access to real time information. We know what we have to do to fix the situation.”
In a release, the company admitted that operations in Western Australia have underperformed despite favourable business conditions, with excessive equipment cross hire from third parties a particular concern. Boom also said that systems integration and management turnover had interfered with the effective merging of Moorland Hire into the Sherrin business. This resulted in the over accrual of revenue during the March quarter, which has since been identified and corrected.
Boom says it has moved to tackle the issues by appointing new management staff in its Western Australia division and at Sherrins. In comments to Australian newspaper The Age, Mitchell said the company had failed to focus its operations tightly enough. He told the paper, “[It is not about] having a shotgun and going for everything, but understanding where your strong capabilities set is and then building on that.”
Mitchell maintains that despite the firm’s recent problems, it still has strong prospects. He said, “Boom Logistics operates in the growing and vibrant resource and infrastructure sector, [and] has a strong asset base and its cash flows are robust.” The company pointed out that while its full year guidance is down, it forecasts increased profits for the three months to the end of June, compared with the two previous quarters.
