Mainfreight result 'satisfactory'

Improved second-half trading by bellwether logistics company Mainfreight underpinned a strong result with a record $89.6 million after-tax profit.

Mainfreight sales revenue was up 2.1% to $1.92 billion and earnings before interest, tax, depreciation and amortisation at a record $149.1 million, up 8.5% on the previous year.

Group managing director Don Braid said the overall financial result, for the year to March, was ''satisfactory'', noting the first two months of the current year's trading was a ''further improvement'' on a year ago.

''We're focused on developing all our offshore operations into significant profit and revenue contributors for our group,'' Mr Braid said.

Without giving specific guidance, Mr Braid said he was ''confident of bettering'' Mainfreight's financial performance again, in the year ahead, by maintaining its momentum.

Mainfreight shares were up almost 10%, at $1.24, following the announcement.

Craigs Investment partners broker Peter McIntyre said the performance in all countries was ''exceptional'', with second-half trading in particular ''absolutely stunning'' for Mainfreight. Second-half revenue was up almost 3%, at $971.7 million.

He highlighted a recovery in Europe, which in the past had been a drag on Mainfreight and better profit margins were attained.

While after-tax profit was up 36% to almost $90 million, a $23 million increase, contributing to that was an abnormal gain of $12.15 million, over an ongoing disputed settlement with the seller of 2011 acquisition, Netherlands-based Wim Bosman.

''After three years in Europe, Mainfreight are taking action to right-size the business, closing down an unprofitable operation in Belgium,'' Mr McIntyre said.

Mr Braid said Asian sales revenue was up 26.2%, to $US37.7 million ($NZ44.15 million), with all branches improving their performances.

''As with our United States business, strengthening European trade lanes into and out of Asia is of the utmost importance,'' he said.

Continued Asia expansion included the opening of a 12th branch, in Thailand, re-siting the Singapore branch to Changi Airport, planned openings of second branches in Thailand and Taiwan, plus researching opportunities to expand with branches in Vietnam, Malaysia, the Philippines and India.

 

simon.hartley@odt.co.nz

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