Kiwi Giant Mainfreight Posts Record Result

By Glenn Dyer | More Articles by Glenn Dyer

Like Fisher and Paykel Healthcare on Monday, Kiwi freight giant, Mainfreight has reported record revenue and earnings for the year to March 31.

Mainfreight said on Tuesday annual profit of $NZ141 million ($A132.5 million) was the best ever recorded, while revenues rose nearly 13% to $NZ2.954 billion ($A2.44 billion) a jump of more than $NZ337 million.

The company rewarded shareholders with a near 25% jump in total dividends for the March year of 56 NZ cents, up 11 cents with a final of 34 cents a share.

CEO Don Braid said in yesterday’s release Mainfreight had expanded into New Zealand regions never serviced before and additional regional branches were in the final stages of planning, for opening in coming weeks and months.

“Our logistics business increased its warehousing footprint, including expansion into Cromwell to service the fast-growing Central Otago region, and has new sites under construction in Hamilton, with planning underway for Tauranga. A ninth site in Auckland has also opened.”

‘We expect to continue enhancing our network in the coming years, with an expected $350 million of capital expenditure on land and buildings projected over the next two years. It is expected that further investment in leased facilities will also continue, to offset short-term growth requirements from increasing customer demand,’ he said.
The New Zealand operations achieved revenue of $718 million up 7.9%.

The Australian business did much better – revenues up 13.9% to $A710.17 million ($A752 million).

“The new branch location for Transport was opened in Toowoomba (having been delayed), and the Geelong branch moved to a new facility. Plans are underway for additional domestic freight facilities in Sydney and on Queensland’s Sunshine Coast. Construction of our new Adelaide facility is expected to commence in late 2019.

In our Logistics business, four new warehouses were opened with an additional AU$12 million of new business. Our standing in the premium beverage sector continues to grow.

“New warehouse business has, in turn, flowed into domestic freight tonnage. Additional warehousing capacity is planned in the coming year for Brisbane, Sydney, Melbourne and Perth, including purpose-designed capacity to aid warehousing of retail dangerous goods, which will be complemented by our specialist dangerous goods transport business, ChemCouriers.

“Our Air & Ocean business improved both its sales growth and profitability over the prior year, with a strong emphasis on export related growth, particularly in the perishable airfreight sector. As with the balance of our Air & Ocean network globally, there is an emphasis on the development of LCL (less than Container Load) consolidation activity,” the company said.

In Europe revenue rose to EU€376.28 million up 12.0% while in the US revenue jumped 13.5% to US$493.86 million.

Investors liked the results with the shares up 4% to $NZ37.45. That was a different outcome to that for Fisher and Paykel Healthcare which fell for a second day yesterday, down 4% to $15.43 after 3% plus fall on Monday in the wake of the record results release.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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