CEO Gerhard van der Horst said last week that Crossroads, in which Nedbank's private equity unit has a 40% stake, targeted businesses that added value to the service it offered and had increased its geographic spread.
Most transport companies, listed and unlisted alike, are struggling to survive the recession.
Van der Horst said Crossroads had a strong balance sheet, with gearing that was close to 50%.
“We are relatively conservative, and this has paid off,” he said. The company had no problem raising capital. “We have a sound business.” For now, he wanted to ensure the company, spun off from shipping group Trencor in a management buyout, was “well-run”.
Black empowerment groups own more than 30% of the shares in Crossroads. Van der Horst said all the shareholders added value to the business.
The company was happy with Nedbank Corporate Equity's contribution at strategic level.
It was not considering listing in the short term, he said, noting that it could fulfil its growth strategy without a flotation. “We review this all the time.”
Van der Horst admitted that business conditions were tough, but said the market was stabilising.
Some transport and logistics companies were not going to survive as they did not have sound balance sheets, he warned.
High fuel costs, lack of credit availability and a decline in the volume of goods such as commodities, which were down 20%-30% from a peak a year ago, were among factors that would keep such companies under immense pressure.
Crossroads had not been left unscathed. Van der Horst said mining companies, for an example, had cut back production, hitting transport operators.
But he said Crossroads, whose clients include Anglo American, was diversified and operated in many sectors.
The company, which owns Skynet Worldwide Express, a courier subsidiary, was an official courier for the South African government, he said.
Other big customers included the University of SA and the Independent Electoral Commission, the election body.
Unlike transport companies such as Super Group and Imperial Holdings, Crossroads had a strong courier business, Van der Horst said. The courier division generated half of the company's revenue of about R1,4bn.
Crossroads also handled full truckload heavy haulage, express road freight distribution and warehousing, domestic and world courier services, motor vehicle franchises, and automotive parts and services.
Source: Business Day
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