Mainfreight cracks $2 billion
Auckland-based logistics company makes inroads against its global competitors
Mainfreight’s multinational competitors, including European giants DHL and Kuehne + Nagel, are increasingly giving up market share to the New Zealand firm as its global clout increases, says managing director Don Braid.
The Auckland-based company, which cracked the $2 billion revenue mark for the first time in its full-year result yesterday, is expanding rapidly across Asia, North America and Europe as it pushes to become a major international logistics player.
An expansion into Vietnam is on the cards this year, with a branch set to open in Ho Chi Minh City, while the firm is also eyeing a move into Brazil. Braid said there was potential for an operation to be established in Sao Paulo.
“As we become more of a global player we compete with those multinationals more often — and we’re winning business off them,” he said. “It’s an exciting time for us and it’s good to know that we can compete.”
Mainfreight reported a 7.7 per cent rise in annual profit before abnormal items to a record $83.5 million, just above its own guidance of $80 million to $83 million.
The company had a $1.1 million one-off cost in the latest financial year, compared with a $12.1 million abnormal gain a year earlier.
Mainfreight also set a new record for earnings before interest, tax, depreciation and amortisation (ebitda), which jumped 8.7 per cent to $162.2 million. Sales for the year rose 6.8 per cent to $2.05 billion.
Rickey Ward, NZ equity manager for JBWere, said it was a solid result.
“It certainly beat my expectations,” Ward said. “Growth is far from mature in this business.”
Mainfreight shares, which have gained 26 per cent over the past year, closed up 5c at $15.95 last night.
Ward said the stock could potentially rise “well north” of $17 over the next 12 months. “This company has got a consistent track record of growing earnings and growing revenue.”
Mainfreight said its ebitda performance in the final half of the year was disappointing, slowing to an 8.4 per cent increase from a 13.1 per cent lift in the first half as operations in the United States and Australia came under pressure.
Braid said costs had increased in the US, while the economic downturn and heightened competi- tion across the Tasman were challenging. The company’s improved performance in Europe, a market Mainfreight entered through an acquisition in 2011, was one of the highlight’s of the result, he said.
European sales lifted 3.6 per cent to 259.7 million ($390.5 million), while ebitda jumped 33.5 per cent to 11.9 million. “It’s a good step forward for us, particularly after the criticism that we’ve had for the last couple of years about our performance in that region,” Braid said.
New Zealand revenue rose 7.4 per cent to $542.7 million, with ebitda increasing 9.2 per cent to $74.6 million.
In Asia, revenue jumped 17.3 per cent to US$44.2 million ($60.8 million), while ebitda lifted 41.6 per cent to US$5 million.
Braid said slowing economic growth in China was not affecting Mainfreight’s business there.
“If you have a look [at] our numbers, in terms of percentage improvement it’s the best area,” he said.
Mainfreight will pay a final dividend of 20c a share on July 17, taking the total dividend for the year to 34c a share.