Trade Agreements support Lindsay's (LAU) logistics and rural facilities expansion.

Recent investor tour of the Lindsay Australia (LAU) logistics and rural facilities in QLD highlighted that the company is exceptionally well positioned to capitalise on the growth in domestic and offshore fresh produce transport and expanded horticultural production in Northern QLD. Completion of the new Lindsay Fresh Logistics facility at the Brisbane Produce markets provides another $50m+ high margin revenue potential relating to import/export volumes via Port of Brisbane and commercial air freight. Benefits of a lower $A and potential 20%-30% tariff reduction via trade agreements is likely to ignite sustained demand for produce distribution into the Asian and Middle Eastern markets. Combined with construction of new facilities in high growth produce regions during FY16e- Adelaide (SA), Mildura (VIC) and Mareeba (FNQ)- we expect 10%-15% revenue growth per annum during FY16-FY18, with upside risk. Benefits of scale, efficiency, compliance and system investments are likely to support continued market share growth as sub-scale operators lose market share and are consolidated. Given the immediate growth outlook, our short term valuation suggests at least 20% upside.