Mainfreight outlook confident

Mainfreight has its eyes firmly on future financial performances. Photo supplied.
Mainfreight has its eyes firmly on future financial performances. Photo supplied.
Logistics and transport company Mainfreight produced an annual result not typical of the past where it was bullish on everything, Craigs Investment Partners broker Peter McIntyre said yesterday.

Revenue growth was up and profit growth was solid but Mainfreight was not definitive about its outlook and that could become negative for investors and the market, he said.

The company reported an operating profit before tax and abnormal items of $121 million for the period, up 10% on the previous corresponding period.

This year, Mainfreight had a loss of $1.6 million on abnormal items compared to a gain last year of nearly $11.8 million.

The company also paid more tax this year, cutting its reported profit to $82.4 million from $89.64 million in the pcp.

Earnings per share fell to 82.87c compared to 90.52c in the pcp.

Revenue was up 6.7% to $2.05 billion compared to $1.9 billion.

An interim dividend of 20c per share took the total dividend to 34cps.

One of the major milestones reached by Mainfreight during the year was breaking $2 billion in revenue.

Mr McIntyre said Mainfreight was a ''barometer company'' and it should be no surprise it found itself going well in New Zealand and struggling in Australia and parts of the United States.

Mainfreight managing director Don Braid said that across all geographical segments, operating earnings were improved, including European operations.

But in total, the second six-month performance disappointed.

Two areas that had the biggest slowdown were the United States, where a poorer second half from Mainfreight USA added to a disappointing performance from CaroTrans, and Australia, where domestic performance margin was hurt by increased cost structures and compressed margins.

''Consistent performance from New Zealand and the ongoing improvements from Asia and Europe complete the year-end result.''

Looking at the divisions, Mr Braid noted the strength of the New Zealand presence meant all divisions increased profitability and achieved revenue growth.

The New Zealand transport operations gained a large number of new customers and increased the number of consignments transported through its network by 150,000. That built on similar levels of growth in the previous year.

The air and ocean division increased revenue and profit performance through strengthening the regional network and improving import volumes alongside a greater share of dry airfreight export tonnage.

''As our global network continues to develop and intensify, our New Zealand operations are attracting tonnage from these multi-national customers. Such are the benefits derived from a strengthening global network.''

In Australia, Mainfreight was expecting a tougher-than-usual time across its Australian divisions in the short term, Mr Braid said.

While the Australian improvements might have seemed satisfactory in the year under review, when compared to New Zealand's level of growth and the relative size of the Australian market, he expected more, in order to achieve Mainfreight's own aspirations and expectations.

''Nevertheless, we continue to make progress in what is a difficult and competitive market. Australia's current economic environment has not made this any easier.''

As they did in the previous year, all branches throughout Asia improved their financial performance during the year. Mainfreight opened branches in Beijing and Taiwan, taking the number of branches to 15 across five countries in the Asian region.

An office was expected to open in Ho Chi Minh City, Vietnam, this year.

In his outlook, Mr Braid said the company had expected a stronger result but the slowdown in Australia, and a less satisfactory final result from the US, disappointed.

''We are not a company which views performance through the rear-vision mirror. It is about the future we are interested in.''

Those shareholders and analysts interested only in the coming year's results should expect to see further improvement on the results reported yesterday.

Trading in Australia was tougher than expected but it Mr Braid said the benefit of a worldwide network will offset any negativity seen in Australia as it recovered economically.

''And for those of you whose interest lies beyond the next financial market, you can be sure that we also look to the far horizon.''

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