European ‘hiccup’ for Mainfreight
Mainfreight’s shares were punished by the market after the trucking and logistics company revealed a ‘‘hiccup’’ in its European trading.
The issue closed off 95c at $9.40 yesterday, after announcing a 2.7 per cent easing in third-quarter profit to $17.7 million, from the same 2010 period. Freight volumes and returns failed to beat the last year’s levels in the third quarter and the company said December trading was disappointing.
The numbers looked better for the nine months ended December, with profit up 35 per cent to a record $46.8m. Dutch freight firm Wim Bosman Group, bought by Mainfreight last year for $205m, was a big contributor to growth.
Earnings before interest, tax depreciation and amortisation (ebitda) rose more than 50 per cent to top $100m for the first time, and group revenue jumped 35.3 per cent to $1.37 billion.
But excluding Wim
Bosman’s results, Mainfreight’s revenue firmed 3.9 per cent, and ebitda 17.9 per cent.
‘‘Yes, Wim Bosman has assisted us to get us to those record levels, but that’s why we bought the business,’’ Mainfreight group managing director Don Braid said. Wim Bosman turned over $287.3m in revenue and generated $20m of ebitda in the nine months to December, but its performance fell off expectations in the second and third quarters.
While Mainfreight had ‘‘the odd hiccup’’ in its European business, with a lack of warehouse use, it was comfortable about where the business sat, Braid said. The company knew it would lose some business when it bought Wim Bosman, but in the last month or so it had won ‘‘a number of accounts’’ that would kick off in mid-2012, he said.
That meant the outlook for the final quarter was likely to be similar to the third, although the company was confident of increased trading through to the end of the year. ‘‘Where our excitement lies is in the potential of the business and the new business we’ve gained for the new financial year,’’ Braid said.
Mainfreight’s results were a mixed bag in regions other than Europe. It performed reasonably well in New Zealand and the United States, struggled in the Australian international division and remained fairly static in Asia.
Craigs Investment Partners adviser Stuart Hardie said the lurch in Mainfreight’s shares was a sign of the ‘‘savage’’ market.