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ONE of Australia’s biggest manufacturers of heavy-duty trailers for the trucking sector has made an unexpected decision to sell its core business and concentrate on parts supply.

Australian listed public company MaxiTRANS Industries Ltd said it had entered into an asset sale agreement with privately-owned Australian Trailer Solutions Group (ATSG) to sell its trailer manufacturing, service, rental and factory-owned dealers in Australia and New Zealand for $30.257 million.

The Victorian-based ATSG will also take over MaxiTRANS’s Ballarat manufacturing property while company-owned properties at Hallam and Derrimut will be sold to another party for $18.05 million.

The businesses, which will retain the MaxiTRANS name, will be sold subject to shareholder approval.

MaxiTRANS said it is leaving the trailer manufacturing business because “the financial performance of trailers has been volatile”.

In a statement to the Australian Securities Exchange (ASX), MaxiTRANS managing director and CEO Dean Jenkins said: “What we are announcing today creates two simplified and more focused businesses.”

He said the company had “explored a range of alternatives to address these issues”.

“We have concluded that these steps provide the best outcome for our shareholders, customers and people, while also creating a brighter future for the trailers business under ATSG’s ownership,” he said.

MaxiTRANS reported in its first-half year report for 2021 that its order book for trailers was up 300 per cent on the same period last year.

It said net profit was $8.3 million for the first half of the 2021 financial year, compared with a loss of $1.2m in the same period of 2020, while net profit after tax was $5.7m.

The revenue for the half was $184.6 million, up 12.9 per cent on the corresponding 2020 half.

MaxiTRANS will now change its name to MaxiPARTS Limited (MaxiPARTS) and will remain listed on the ASX.

The company said these agreements “will transform MaxiPARTS into a dedicated commercial parts distribution business and are consistent with the strategy to optimise growth opportunities in MaxiPARTS”.

“A standalone MaxiPARTS will have a stronger financial platform from which to develop its market leading position and greater financial flexibility to play a prominent role in industry consolidation,” it said.

“It will also be a less complex business, which will enable a significant reduction in corporate overhead costs.”

Completion of the sale is subject to certain conditions, including shareholder approval, and is expected to occur by the end of August 2021.

Whilst the change separates MaxiPARTS and MaxiTRANS, both businesses have formally agreed to continue working together into the future.

Mr Jenkins said that “customers will remain core to everything we do, and we believe these changes will add focus and will improve the products and services we offer”.

“MaxiTRANS and MaxiPARTS will continue to deliver customer support – with all operations, manufacturing sites, facilities, rentals, service centres and parts distribution remaining open and operating as normal,” he said.

“For our customers we do not foresee any immediate change in our day-to-day operations or customer sales and support.

“Our customer contact points for sales, delivery, service, and parts remain unchanged and are available for enquiry and ongoing customer support and communication.

“For 75 years, we have been building MaxiTRANS into one of the transport industry’s leading companies.

“MaxiTRANS and MaxiPARTS will continue to build on this heritage, with our ongoing commitment to our customers, employees, suppliers, and the transport industry to deliver safer, more efficient, and reliable transport solutions.

“We will continue to provide ongoing customer support wherever and whenever it is needed.”

By Neil Dowling

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