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QF & Auspost Spend $750m

Fri Dec 19, 2003 9:43 am

So with A380's, A330's, A320's & new Dash 8's, not to mention Jetstar, they've decided to buy another business!!!! Thank god QF got knocked back from buying 25% Air New Zealand.

Qantas and Australia Post buddy up for $750m
19/12/03 By: Rikki Bannan

Qantas Airways Limited (QAN) announced this morning that it, together with Australia Post, have acquired express road freight operator Star Track Express. The 50:50 joint venture cost the air carrier and government-owned company $750 million.

Qantas chief executive Geoff Dixon said the joint acquisition added to Qantas’ portfolio of freight businesses, including its domestic freight operation Australian Air Express, which is also operated with Australia Post.

“This acquisition is consistent with the Qantas strategy of growing its non-airline businesses”, he said.

Star Track Express is involved in the distribution of high value, express time, business-to-business packages. The majority of the company’s revenue comes from the express road freight division, although it is also involved in the air express and warehousing sectors.

Mr Dixon said he was pleased to acquire such a business.

“Star Track Express is a high quality operation that provides superior service levels and has achieved consistent revenue and profit growth”, he said.

“Australia Post and Qantas will run the business as a separate joint venture to ensure its brand, management, operational focus and customer relationships are maintained”, Australia Post managing director Graeme John said.

“Our aim is to grow the business-to-business market for express logistics. The business potential, both in Australia and overseas, means that the market will provide plenty of scope for future opportunities”, he added.

The companies said the purchase was made through a combination of net cash reserves and undrawn credit facilities.

The current chief executive of Star Track Express, Mr Derek Lightfoot will continue to run the business.

For the year to June 2004, Star Track Express is forecast to achieve normalised earnings before interest, tax, depreciation and amortisation of $84 million. Over the past five years, revenue and profit growth have averaged 10% per annum.

“It is expected that revenue and profit growth will continue”, they said.

At close of trade yesterday Qantas shares were unchanged at $3.33

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