Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


UPDATE: Mainfreight shares surge near record

UPDATE: Mainfreight shares surge near record after annual profit climbs 36%

(Adds share price, broker comment and presentation slides)

By Paul McBeth

May 28 (BusinessDesk) - Shares of Mainfreight surged back toward record levels after the transport and logistics group boosted annual profit 36 percent, helped by a settlement with the former owners of its Wim Bosman unit in Europe, and said it's focused on growing its global footprint on the way to becoming "a substantially bigger and better business."

The stock climbed 8.4 percent to $14, just short of the $14.08 peak on May 9, making it the biggest gainer on the bourse today.

The Auckland-based company lifted net profit to $86.6 million, or 90.27 cents per share, in the 12 months ended March 31, from $65.9 million, or 66.45 cents, a year earlier. Stripping out the $12.1 million gain from its Wim Bosman settlement and restructuring costs in Europe, earnings rose 14 percent to $77.5 million on a 2.1 percent gain in sales to $1.92 billion.

"The result was ahead of market expectations and there's also some encouragement in the comments regarding the underperforming European operation," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. "All in all, the business is back on the growth path, and investors are looking to buy into the stock."

Mainfreight recognised the $12.7 million Bosman settlement in the first half, following a dispute with the former owners after the European business lost several key trading accounts.

"The aches and pains of establishing our footprint in Europe through our 2011 acquisition are behind us, and the potential for growth can be clearly seen in Australia, Asia and the Americas," the company said. "We are focused on developing all our offshore operations into significant profit and revenue contributors for our group."

The company dropped parcel-freight from its Australian transport unit in the year, closed an unprofitable Belgian operation and is putting more resource into building long-term customer relationships in the US domestic market.

"We are confident of bettering our financial performance again," the company said. "More importantly, we will maintain the momentum we have, growing Mainfreight into a substantially bigger and better business."

Mainfreight indicated it will be looking at making acquisitions which will probably be offshore to support its growth plans, according to presentation slides at today's analyst briefing.

The board declared a final dividend of 19 cents per share, payable on July 18, taking the annual return to 32 cents.

Mainfreight's New Zealand unit boosted sales 6.6 percent to $505.2 million and earnings before interest, tax, depreciation and amortisation rose 12 percent to $67.4 million. The Australian business increased revenue 5.8 percent to A$458.5 million, and lifted Ebitda 16 percent to A$35.2 million, and its contribution to group earnings is expected to eclipse New Zealand's "in the not too distant future."

The company's American unit increased sales 1.7 percent to US$363.6 million and Ebitda rose 11 percent to US$18.9 million, and is expected to grow at a faster pace than than the rest of the company in the near term as market opportunities are exploited.

The European business increased sales 2.4 percent to 250.7 million euros, although Ebitda declined 5.7 percent to 8.92 million euros.

"We are cautiously optimistic that the worst of our European business's disappointing performance is now behind us, and is well-positioned to provide more growth and profitability into the future," the company said.

Mainfreight's Asian unit boosted sales 26 percent to US$37.7 million, and Ebitda climbed 36 percent to US$3.52 million, largely through trade to and from the US.

The company increased operating cash flow to $120.4 million from $83.2 million, holding cash and equivalents of $54.5 million as at March 31. Mainfreight held bank debt of $258.4 million at the end of the financial year, down from $277.3 million a year earlier.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news